New developments are brewing in the world of durable medical equipment, and according to local dealers, they aren’t positive.

Competitive bidding, a Medicare initiative intended to save taxpayer money and limit fraud, has changed the way Montanans can get diabetic testing supplies. 

The providers of those supplies, however, say that is the first step to putting them out of business. 

Roger Peters, manager of Kalispell Medical Equipment, said competitive bidding will restrict patient access to medical supplies such as oxygen tanks and wheelchairs. Montana durable medical equipment companies contend this could send many elderly or infirm patients out of their own homes and into retirement communities.

“It is pretty bleak,” Peters said. “It’s going to get worse. We need something like a rural allowance to help with the increased cost of daily deliveries.”

Michael Fierberg, regional director of communications for the Centers for Medicare and Medicaid Services in Denver, said there is a concerted effort by durable medical equipment providers in Montana to obfuscate the truth.

“The only people who lose here are the DME suppliers who have overcharged the American taxpayer for decades,” he said. “This will save taxpayers tremendous amounts of money. We’re talking about in the billions every year.”

Competitive bidding first went into effect in nine large U.S. cities on Jan. 1, 2011. A second round expanded July 1, 2013, to 100 cities, with Boise the closest to Northwest Montana. Despite the fears of durable medical equipment suppliers, Fierberg said there are no plans to expand competitive bidding further at this time.

Fierberg said test studies on competitive bidding for nearly 15 years in Florida and Texas have shown what sort of savings Americans can anticipate — $42 billion over the next 10 years in those second-round cities.

However, a study from the economics department at the University of Northern Iowa says Montana is projected to lose 46 percent of its durable medical equipment providers because of competitive bidding, making things particularly difficult for already underserved Northwest Montana.

John Gallagher, the vice president of government affairs at The VGM Group — a consolidator of durable medical equipment suppliers in rural states — said the equipment companies are put in a no-win situation.

“There isn’t a lot they can do,” he said. “They are getting squeezed from both ends. First Medicare and now Medicaid, they are forced to go by those rates as well.”

Jess Buss, the home medical equipment manager of one of these at-risk locations, Healthcare Plus in Polson, was candid in her assertion that rural Americans would lose access to health care as companies shut their doors.

“It’s a violation of rights if you ask me,” she said. “If the expansion goes through, that will put companies out of business. It’s a threat.”

Durable medical equipment companies (also called home equipment companies) are no longer allowed to deliver the diabetic testing strips to patients, forcing some to head to the companies in person or possibly lose access to supplies. Mail-order companies only provide certain brands and cannot change what a patient receives, so they can elect not to serve that person.

Fierberg disagrees, saying that no location in Montana is one of the 99 nationally affected for large equipment such as wheelchairs and oxygen equipment. The only thing these local suppliers would be on the hook for would be diabetes testing equipment.

Even then, diabetics on Medicare or Medicaid can go to any approved pharmacy to get the testing equipment or receive it through the mail and not have to rely on the central hubs. This, Fierberg said, will combat the rising costs  of durable medical equipment.

“The original Medicare program — I’m talking back in the ’60s, or at the latest the ’70s — had a provision that equipment prices increased with inflation,” he said. “That was without regard to the actual cost of the item.”

Medicare used to allow walkers to be billed for $118, but have cut that under competitive bidding to $46, saving taxpayer money.

To Buss, Peters and others, that is not a business model that is financially viable, but the largest concern in terms of patient care involves medical audits to combat fraud.

“It used to be a patient would come in and we’d provide first, ask questions later,” Buss said. “But now we can’t provide equipment to a patient unless everything is in order. I saw one hospital bed go to a patient two weeks after they should have got it. It can be the difference in health care.”

Montana currently has 33 durable medical equipment suppliers. According to the University of Northern Iowa projection, the Big Sky state could lose 12 of these, including those in places such as Polson, Cut Bank, Stevensville, Anaconda and Dillon.

Peters is worried about what he said is an inevitable push to implement competitive bidding in smaller markets. 

“We still have to serve these patients,” he said. “But they might have to come pick up their own supplies at Kalispell Medical Equipment, and for a lot of them, travel is not easy.”

Gallagher agreed, saying Kalispell Regional Healthcare, which owns Kalispell Medical Equipment, might have to shrink coverage down to the city limits of Kalispell.

“It’s not because Roger and KRMC don’t want to take care of those patients,” he said. “They just can’t. It’s an unintended consequence of this. It’s a bad law.”

Fierberg was firm in his rebuttal. 

“The DMEs see some closing their doors and say it proves this law isn’t working,” he said. “All it proves is that some people go out of business because they are lousy business people.”

Reporter Ryan Murray may be reached at 758-4436 or by email at rmurray@dailyinterlake.com.