70 Cities to See Competitive Bidding for Medical Equipment

WASHINGTON — Atlanta, Austin, Dayton, Greensboro and High Point, N.C., are among 70 metropolitan areas that will be covered by a new Medicare rule requiring competitive bidding for durable medical equipment and supplies.

Kerry Weems, administrator of the federal Centers for Medicare and Medicaid Services, announced the rule Tuesday at a news conference in Los Angeles. The southern California area has been plagued by widespread fraud in sales of such equipment charged to Medicare.

Ten other metropolitan areas — including Palm Beach, Broward and Miami-Dade counties — have been scheduled to come under the competitive bidding rule in July. The areas announced Tuesday will come under the rule in 2009.

Under the rule, companies that sell durable medical equipment will have to be industry accredited and certified by Medicare to ensure that they are a legitimate business and must submit bids for the equipment items. Companies whose bids come in under a threshold set by the industry will be authorized to bill Medicare for the supplies.

Currently, Medicare sets prices for durable medical equipment based on prior sales data, which Weems said results in overpayments.

The kinds of supplies and equipment that will be covered include: oxygen; power wheelchairs; enteral (feeding tube) nutrients; respiratory devices; hospital beds; pressure-wound therapy; and walkers.

Weems predicted the rule would provide Medicare beneficiaries with better access to quality equipment at lower prices.

Recent investigations by the Health and Human Services' Office of Inspector General have exposed about $1 billion in medical equipment-related fraud. Federal and state task forces also have charged more than three dozen people in Miami for defrauding Medicare in the sale of durable medical equipment.

The durable medical equipment industry hailed the new rules but criticized Medicare for allowing fraud to flourish for so long.

"Medicare has failed to effectively exercise its already ample authority to combat fraud and abuse. It is time for CMS to shine a spotlight on its own processes with respect to its ability to ensure the integrity of Medicare," the American Association for Homecare said in a statement.

"The association questions why it has taken Medicare so long to impose effective measures to prevent fraud."