Medicare savings may be derailed

WASHINGTON, June 10 (UPI) -- A push to save millions in Medicare costs may be in jeopardy due to industry lobbying, Washington observers said.

Using the old purchasing system, Medicare pays nearly twice the going retail price for hospital beds and wheelchairs, The Washington Post reported Tuesday.

Congress tried to put a stop to that, forcing the program to use a competitive bidding process for its durable healthcare goods. The law, passed in 2003, goes into effect in 10 U.S. cities on July 1.

It was expected to save $125 million per year, the Center for Medicare and Medicaid Services said.

A nationwide expansion of the program would save $1 billion, the report said.

But lobbyists are attempting to thwart the initiative, claiming the transition will be hard on patients and squeeze out smaller businesses, the Post reported.

Chairman of the House Ways and Means subcommittee on health, Peter Stark, D-Calif., plans to introduce legislation to delay the start of the new program by 18 months, the Post said.

But, Stark's bill has a built in contingency, mandating the industry accept cuts in fees to match savings expected from the competitive bidding process, the Post said.