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Medical equipment providers, including those in Prince George's, are lobbying for a federal bill to scrap Medicare's new competitive bidding process for home equipment.

As part of a 2003 law, competitive bidding was introduced last year to several states — although not yet Maryland — for certain home medical supplies for Medicare beneficiaries. The program is expected to save Medicare $20 billion during the next decade, according to federal officials.

The Baltimore region is to join the process in the fall of 2011.

Opponents instead propose a pay-off system. Under that setup, the industry would directly pay Medicare the savings that would be achieved under the bidding system. Industry leaders say the $20 billion savings figure is overblown and should be recalculated to figure what their proposed pay-off would be.

The bidding system "is going to drive most small companies out of business," said Larry Crum, executive director of Better Life Home Medical in Clinton, part of the Southern Maryland Hospital Center.

The people who will suffer most will be Medicare participants who will have to use multiple providers, Crum said.

Studies show areas in Maryland, including Baltimore city and metropolitan Washington, will see more than 2,700 jobs lost through the bidding process, according to the Maryland National Capital Home Care Association in Havre de Grace, which represents 941 home medical equipment providers in the state and supports repealing the system.

Limiting home medical equipment contracts to only a few businesses in the region will hurt the rest, said Ashok Kapur, CEO of DHC Medical Supply in Lanham, which has $1 million in annual sales.

"This will reduce suppliers and lead to longer hospital visits since people will have to wait longer to get their equipment," Kapur said. "The whole system is flawed."

He suggested that instead of competitive bidding, the government allow companies to bid for the best price and then allow transactions with any companies that can meet that cost.

Providers and their trade group also are concerned about what they call a lack of information, especially the criteria the government is using to evaluate suppliers and payment rates among bids.

Maryland Public Interest Research Group, a consumer nonprofit, is skeptical that the industry will be able to eliminate the bidding process.

"In concept, competitive bidding lowers costs for consumers and protects the solvency of Medicare. If Congress makes any changes to the competitive bidding program, they should be budget-neutral and should protect the solvency of Medicare," Fielding Huseth, an advocate with the group, wrote in an e-mail.

"This will save patients money because they're going to be paying less out of pocket," said Lorraine Ryan, spokeswoman for the Maryland regional office of the Centers for Medicare and Medicaid Services in Woodlawn. She said the centers have made several improvements to the system since it was initiated.

She said the system also requires all providers to be certified and that companies that don't receive bids can still provide repairs and supplies not included on the bidding list.

lrobbins@gazette.net