Medicare reform bidding program puts local businesses in jeopardy

A Medicare reform program that requires competitive bidding for durable medical equipment is being touted as a money saver for Medicare and its customers and a measure against fraud and abuse, but local medical equipment suppliers say it does anything but — and it’s crippling their business.

“These people in faraway places, they’re just playing games with the numbers,” said Leroy Lewin, who runs Lewin Medical Supply with his wife and sons in Riverhead. The supplier of durable medical equipment said most companies who won bids for contracts with Medicare are located hours away from the Suffolk customers they need to service, having placed “suicide bids” to win the contracts without demonstrating any ability to effectively serve the region, he said.

The only approved DME dealer in Suffolk is Prime Care Medical Supplies in Holtsville. A representative of the company was unavailable for comment Thursday.

Lewin said a piece of equipment like a wheelchair, which costs a little more than $50 per month to rent, is now subject to a 60 percent discount. With only one approved supplier in Suffolk, customers are forced to deal with that company or pay out of pocket to their usual supplier, Lewin said. Their only other alternatives are companies located as far away as Connecticut or Pennsylvania, he said.

“People should be entitled to things and now they have to pay out of their pocket just to get what they need, which really isn’t fair,” said Lewin’s son, Keith. With Medicare making up about 50 percent of the Lewins’ business, the situation hurts both dealer and customer, they said.

“At this time of the day, if it was two months ago, there’d be people out the door waiting to get in. We had two or three people full-time in the showroom out here; now we have one person that’s sitting on his hands half of the day because there’s nothing to do,” Leroy Lewin said.

He has seen a drop-off in calls from the hospital for patients being discharged who need supplies before they can go home, he said. Another result is the loss of attentive customer service.

“We’re local. We have 24-hour, seven-day coverage for emergency service for oxygen clients. These companies in California can’t do that. They’re going to ship somebody a walker, and if it’s broken, ‘Well, we’ll ship you another one in another week.’ Or if they need a wheelchair adjusted, I don’t know who’s going to do that when it just got shipped from someplace far away. They lose all of this personalized customer service,” said Leroy Lewin.

Medicare’s official website describes the program as one that modernizes pricing: “The Competitive Bidding Program replaces the outdated prices Medicare has been paying with lower, more accurate prices. Under this program, suppliers submit bids to provide certain medical equipment and supplies at a lower price than what Medicare now pays for these items. Medicare uses these bids to set the amount it will pay for those equipment and supplies under the competitive bidding program.”

Leroy Lewin argues the current model isn’t feasible.

“The whole system is going to crash. It can’t operate,” he said.

Terry O’Connor, manager of Southold Pharmacy’s DME department, said it took months to complete and submit their bid.

“It was unbelievable what we had to provide in that bid,” he said.

After they failed to win a contract, their business, which this month celebrates a half century serving the community, was “seriously affected,” O’Connor said. He said it survives through accounts not related to Medicare and by lowering retail prices on items that Medicare dropped its reimbursement rates on.

Congressman Tim Bishop has been responsive to several letters the Lewins sent outlining the problems, according to Leroy Lewin. A spokesperson for Bishop said the congressman does not support the program as it is.

Keith Lewin said the problem goes beyond suppliers like his family being threatened with going out of business, especially since so few companies would be left for customers nationwide to choose from.

“It’s really America losing what they’re entitled to,” he said. “People paid into the system forever and they’re dependent on this.”

Photo caption: Leroy Lewin, center, of Lewin Medical Supply, and his sons, Brian, left and Keith at their Riverhead business this week.