Com­pet­i­tive flaws

Bidding pro­gram ex­pan­sion draws com­plaints

Modern Healthcare - - The Week - Jaimy Lee

Although the CMS es­ti­mates that ex­pand­ing the com­pet­i­tive bidding pro­gram for durable med­i­cal equip­ment will save $28 bil­lion over the next decade, in­dus­try groups and economists say the pro­gram is deeply flawed.

The Amer­i­can As­so­ci­a­tion for Home­care said the Medi­care Durable Med­i­cal Equip­ment, Pros­thet­ics, Or­thotics and Sup­plies Com­pet­i­tive Bidding Pro­gram “un­der­mines qual­ity of care and it in­creases costs” in a state­ment fol­low­ing the CMS an­nounce­ment that the pro­gram would move into a sec­ond phase that adds sev­eral prod­uct cat­e­gories, as well as a na­tional mail-or­der com­pe­ti­tion for di­a­betic test­ing sup­plies.

“De­spite the name, we don’t find the pro­gram com­pet­i­tive,” Tyler Wil­son, the trade group’s pres­i­dent, said in an in­ter­view. He added that the pro­gram will re­duce the num­ber of providers in the home-med­i­cal equip­ment in­dus­try, a sec­tor that the as­so­ci­a­tion says rep­re­sents about 1.5% of to­tal Medi­care spend­ing, and that it will make it harder for Medi­care ben­e­fi­cia­ries to get equip­ment they need.

In spite of per­sis­tent com­plaints from in­dus­try groups and ven­dors, the agency launched the first round of the com­pet­i­tive-bidding pro­gram in Jan­uary after is­su­ing a fi­nal rule in 2007 to move away from the fee sched­ule to a com­pet­i­tive bidding process. The pro­gram is re­quired by the Medi­care Pre­scrip­tion Drug, Im­prove­ment, and Mod­ern­iza­tion Act of 2003.

Ac­cord­ing to the CMS, com­pet­i­tive bidding for prod­ucts in nine prod­uct ar­eas in nine mar­kets pro­duced 35% in sav­ings as of Aug. 19.

Med­i­cal equip­ment in the ex­panded com­pet­i­tive-bidding pro­gram in­cludes wheel­chairs, hos­pi­tal beds, and oxy­gen equip­ment and sup­plies. Bidding in the ex­panded pro­gram is sched­uled to be­gin in early 2012 with new prices ex­pected to go into ef­fect in July 2013, af­fect­ing an ad­di­tional 91 mar­kets in the U.S.

In June, 244 economists, com­puter sci­en­tists, and en­gi­neers sent a let­ter to the White House ex­press­ing con­cern about the pro­gram. They wrote that the CMS’ use of non­bind­ing bids and

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