Industry rewards Meek for bill

By Jim Saunders 
6/18/2010 ©  Health News Florida

U.S. Rep. Kendrick Meek, who has led the effort to kill competitive bidding for home medical-equipment suppliers in Medicare, has not gone unrewarded. 

A Miami Democrat who is running for the U.S. Senate, Meek has received at least $95,000 in contributions since January 2009 from people and political committees linked to the durable medical-equipment industry, a Health News Florida review of campaign records shows.

The bidding system, which is fiercely opposed by much of the industry, is scheduled to start in January in Southeast Florida, metro Orlando and seven other regions of the country. It will later be expanded to more areas, including most of Florida.

Federal health officials are expected to announce winning bid amounts a week from today, an important step in the contracting process. But Meek has sponsored an industry-backed bill for months to try to head it off.

Meek spokesman Mahen Gunaratna said the congressman's effort to block competitive bidding is not a result of campaign contributions and is "not about supporting any industry.'' Gunaratna said the bidding system is flawed and could hurt the ability of seniors to get medical services in their homes.

"This is about protecting them and making sure they have the access to care that they need,'' he said.

Meek has received contributions from industry-related people and committees in at least 17 states, ranging from Florida to New York to Iowa to Texas.

Sean Schwinghammer, who serves as executive director of industry groups in Florida and nationally, said equipment suppliers support Meek because they are thankful he took on the bidding issue. The industry contends that competitive bidding could drive hundreds of small suppliers out of business --- with descriptions going so far as to say the process would lead to "suicide bidding.''

"For our industry, he's just stood up and done the right thing and never wavers,'' said Schwinghammer, who works with the Florida Alliance of Home Care Services and the Accredited Medical Equipment Providers of America.

But while Meek wants to block competitive bidding, supporters say the process would save money for taxpayers and reduce Medicare fraud in hotbeds such as Miami. Also, supporters say lower prices could save money for beneficiaries, who have to pay 20 percent co-insurance costs on many types of equipment.

The U.S. Government Accountability Office and the inspector general at the U.S. Department of Health and Human Services have issued reports saying Medicare has paid higher-than-market rates for medical equipment and supplies.

An earlier, aborted attempt to start the bidding system in 2008 projected average cost savings of 26 percent. A price comparison at the time by Health News Florida found savings in the Miami-Dade and Orlando areas of as much as 42 percent for diabetic supplies and 35 percent for an oxygen concentrator.

"If wholly adopted, competitive bidding could reduce Medicare payments for DME (durable medical equipment), help close the disparity with prices paid by others for the same items and services and also help reduce improper payments,'' the Government Accountability Office said in a report to Congress in November 2009.

Industry officials are trying to rebut those arguments this summer as they push to repeal the bidding requirement. As an example, they dispute that bidding would reduce fraud.

Meek's bill to repeal the bidding system, filed in October has gained 247 co-sponsors in the House. But the chances of passing a bill are dimmer in the Senate, where nobody has sponsored the measure.

Schwinghammer said the Senate does not have a bill, at least in part, because Finance Chairman Max Baucus, D-Mont., supports competitive bidding. But Meek and industry officials also ran into another obstacle recently because of a preliminary Congressional Budget Office estimate that the bill would not be "budget neutral'' --- effectively meaning that it would cost the government more money if competitive bidding is scrapped.

The industry earlier agreed to accept lower-than-expected payments to make the bill budget-neutral, but the new estimate said eliminating competitive bidding would still cost an additional $9.6 billion over 10 years. Michael Reinemer, a vice president of the American Association for Homecare, said the industry will have to find additional savings to make sure the bill is budget-neutral.

"We would have to offset that,'' he said this week. "That's the reality.''

The long-controversial bidding issue focuses on items that many Medicare recipients need to live at home, such as wheelchairs, oxygen equipment and supplies, diabetic supplies, walkers and hospital beds. As an indication of the magnitude of the issue, Medicare spent $8.3 billion on durable-medical equipment and related items in 2007, according to the GAO report.

Competitive bidding would replace the traditional system of suppliers getting paid based on fee schedules. Federal health officials briefly started using competitive bidding in 2008 before Congress stepped in and blocked the program amid widespread industry complaints about the bidding process --- complaints that the GAO report indicates were at least partly valid.

Meek was involved in the issue months before he started running for the Senate in 2009. He wrote a letter June 2, 2008, to congressional leaders calling for the earlier version of the bidding program to be delayed, according to his office. Meek and other lawmakers voted in mid-July 2008 to block the program and ordered that it be revised.

During the current two-year election cycle, Meek's campaign reports show contributions from industry officials starting in March 2009 and continuing into early 2010.

The actual amount of contributions could be higher than $95,000 because the latest reports only go through March 31. Also, the reports include vague information about many people, making it difficult to determine what they do for a living.

But Meek received contributions from major players in the industry. As examples, he received thousands of dollars from officials and political-action committees linked to the American Association for Homecare, Ohio-based Invacare Corp., Pennsylvania-based Pride Mobility Products and Illinois-based Apria Healthcare. Meanwhile, he collected dozens of contributions from smaller suppliers, particularly from people in South Florida.

Reinemer said Meek's visibility increased in the industry after he took the lead on trying to repeal bidding, which helps explains the contributions. As a comparison, Reinemer said farmers are likely to contribute to members who support them on agriculture issues.

But Meek also has become closely identified with the bidding issue. An industry effort in January to build congressional support for Meek's bill was dubbed "Meek Week," according to posts on the American Association for Homecare's Internet site.

Sixteen current Florida congressmen and former Rep. Robert Wexler, who resigned in January, co-sponsored Meek's bill. But Meek has far outpaced other members in contributions from the industry since early 2009.

Gunaranta, the Meek spokesman, said the issue would disproportionately affect Florida, which is slated to have two of the initial bidding areas. He said a flawed bidding system could hurt home-care services to seniors, requiring more expensive care in hospitals and rehabilitation facilities.

"The projections that this program is some sort of cure-all are widely off,'' Gunaranta said.

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.