It not only highlighted Congress' inability to grapple with ways to make Medicare operate more efficiently, but also exposed a political culture that continues to frustrate attempts to fix the flawed system.

''The more decisions are made out of Washington, the more stakeholders you have in what Congress says,'' said Elizabeth Wright, vice president for government affairs at the nonprofit Citizens Against Government Waste. ``I know a lot of these people at these trade associations. They don't like fraud any more than anyone else. But they're there to fight for their constituents and to make sure they get the good end of the lollipop.''

South Florida's Graham, who decried Congress' delay of competitive bidding, said: ``There are so many individual stakeholders who will oppose any reform if they think it will affect their interests adversely.''

The American Association for Homecare, a nonprofit organization that represents 600 members, including medical equipment providers, argued that Medicare's process of selecting competitive bidders was unfair because it left out hundreds of legitimate businesses.

'Our members called their congressmen and said, `This is going to put us out of business,' '' said Michael Reinemer, the group's vice president for communications and policy. ``It was an issue of fairness in allowing these providers to continue to serve their patients.''

People associated with that trade group, along with five large equipment suppliers, have given more than $427,000 to both Democratic and Republican campaign committees in 2007-08, according to Congressional Quarterly Today.

Those contributions are merely a fraction of the tens of millions of dollars that individuals, lobbyists and political action groups gave during the same period to politicians on congressional committees that oversee Medicare and other health issues, according to the nonpartisan Center for Responsive Politics.

Grassley, former chairman of the Senate Finance Committee, which oversees Medicare, said medical equipment suppliers hold sway with Congress because they represent small-business owners who are important constituents.

But Grassley said that he, current Finance Committee chairman Sen. Max Baucus, D-Mont., and other members of Congress found fault with how Medicare implemented the competitive-bidding program.

''It did harm to small-business people -- about two-thirds of the bids were thrown out because of technicalities,'' Grassley said. ``You got the feeling it was put together hastily and not well thought out.''

The economic reality is that medical equipment suppliers would stand to make less money if the competitive-bidding program takes effect -- and Medicare could save billions in the future.

For decades, Medicare has set generous rates of reimbursement for renting or buying medical equipment. For example, the program pays $4,023 for a powered wheelchair that can be purchased online for $2,174.

COMPETITIVE BIDDING

Kerry Weems, acting administrator of Medicare, said competitive bidding would dramatically lower government reimbursements for such products.

''The prices are too high,'' he said. ``Once you move it to a competitive marketplace, it's difficult to say that you're overpaying for this or underpaying for that, because it's not the government that's determining the price.''

Weems said Congress' vote to delay competitive bidding -- which was linked to a bill to block a 10.6 percent Medicare pay cut for physicians -- was classic Washington politics.

''Here is the important lesson to take away from this,'' said Weems, a veteran administrator at the U.S. Department of Health and Human Services. ``Changes that this program makes were fairly modest.

``If you look at the hoopla it has created -- then compare that with many of the statements we hear about the need for Medicare entitlement reform -- this shows how really, really hard entitlement reform could be.''

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