Medical equipment suppliers provide items like walkers and oxygen tanks. Photo: Jonathan Wiggs/The Boston Globe via Getty Images

Companies that supply medical equipment through Medicare say the program's plans to boost their payments isn't a giveaway, but rather a reflection of the reality that small companies serving remote areas have been crushed by Medicare's competitive bidding system.

Background: The durable medical equipment industry helps seniors and disabled people get their walkers, wheelchairs, oxygen tanks and other supplies.

  • It also has a long history of Medicare fraud and questionable billing.
  • Medicare designed a competitive bidding program several years ago to control costs, and the federal government is now evaluating how the program is affecting beneficiaries' access to supplies.
  • In a regulation earlier this month, which mostly affects the suppliers of durable medical equipment rather than manufacturers, Medicare acknowledged the bidding program has created some problems for rural suppliers. It raised their payment rates to help stem some of the losses.

What we're hearing: Our original story on the increased payments struck a nerve. People in the industry argue the policy, first promoted by Tom Price, is deeper than just restoring higher rates.

  • Gary Sheehan, CEO of Cape Medical Supply in Massachusetts, said the main issue is how Medicare "concocted a ham-handed bidding program without appropriate expertise." He pointed to an independent study that found problems with the bidding system.
  • "This increased reimbursement buys us time. Without it, access to (durable medical equipment) in the rural parts of this country will disappear," said James Long, who runs Littleton Respiratory Homecare, a family-owned supplier in Ohio.
  • "We're in an industry that is really struggling to survive. There have been times where I don't know where the money is going to come from," said Matt Russel, an executive at ABC Health Care in Virginia.
  • Jason Jones, the president of Jones Medical Supply in Alabama, said "money-hungry crooks" have hurt the industry's reputation while many suppliers "cannot afford to provide many of the necessary items that are ordered for these beneficiaries."

Yes, but: There are always tradeoffs in health care. Higher funding for rural medical equipment suppliers, even those in need of increased funds, still means taxpayers and seniors will foot the bill.

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