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New Economic Study Exposes Faults in Controversial Medicare Competitive Bidding Program Scheduled to Start this Fall
Date:8/10/2009

Study Shows that Competitive Bidding Benefits Insurance Companies and Forces Many Seniors to Use Out-of-State Providers

ARLINGTON, Va., Aug. 10 /PRNewswire-USNewswire/ -- The American Association for Homecare hosted a media conference call this afternoon, unveiling a new economic study that exposes severe flaws in the Medicare competitive bidding program for durable medical equipment and services. The bidding program is set to restart this October. The study, released today by Brian O'Roark, PhD, of Robert Morris University, found that the federal Centers for Medicare and Medicaid Services drastically misread the marketplace and that the current competitive bidding program reduces overall competition and hurts the quality of patient care.

"There is nothing competitive about this misconceived program," said Tyler J. Wilson, president of the American Association for Homecare. "This study joins an extensive body of evidence showing that this bidding program will produce fewer competitors, fewer homecare services, and lowest-common-denominator healthcare for older Americans and people with disabilities who require medical care at home."

The study analyzed the results for round one of the bidding program, which took place in ten areas nationwide last year. The bid program, which began on July 1, 2008, was delayed by Congress on July 15, 2008 because of serious flaws in the bidding process. O'Roark's study revealed several shocking flaws in the competitive bidding program:

  • During the bidding implementation, nearly 40 percent of companies awarded durable medical equipment contracts for Pittsburgh patients were located outside of Pennsylvania.
  • Had the competitive bidding program continued, homecare providers would have had no choice but to cut service, lengthen patient response times and give up providing some equip
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SOURCE American Association for Homecare
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