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

ment altogether. Contracts were also awarded to unlicensed providers, which would have violated state standards.
  • Reduced access and declining quality of care under competitive bidding will force patients into institutionalized care. This will lead to higher long-term costs for Medicare -- not lower as CMS suggests.
  • One group that would benefit from competitive bidding is private insurance firms. Medicare reimbursement rates are the gold standard and the basis for reimbursement by all other forms of health insurance. An artificial lowering of Medicare rates is immediately followed by a lowering of all others. As price schedules fall, insurance firms' costs fall with them.
  • Despite the glaring flaws identified in this study, the competitive bidding program is set to go into effect in late October, 2009.

    "The bidding program forces an unsustainable business model on the DME industry," said study author Brian O'Roark, PhD. "Ninety percent of providers were excluded from participating because they could not meet the bid. Those who qualify are forced to sustain prices for three years -- an untenable position for any business."

    The misguided bidding program would allow the government to selectively contract with only a small group of homecare providers, based on lowest-cost, forcing out providers who use high-quality equipment or provide critical patient services. The bidding program ignores the provider's ability to serve a geographic market, meaning fewer home visits to patients in rural areas. By ignoring the role of service, bidding will result in fewer resources for setting up and adjusting wheelchairs, walkers, and hospital beds.

    Despite its misleading title, this bidding program is anti-competitive. During its initial implementation in 2008, the vast majority of providers were shut out of the program. Of the more th
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    SOURCE American Association for Homecare
    Copyright©2009 PR Newswire.
    All rights reserved

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