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AAHomecare and Maryland DME Provider Take Medicare Agency to Court Over Competitive Bidding Program
Date:6/19/2013

culate the payment amount, in every State where the Secretary accepted bids from unlicensed bidders, after eliminating all contracts and bids from unlicensed bidders."

"Today's lawsuit zeroes in on a critical flaw in the bidding program—the failure to ensure that all bidders had satisfied state and local licensing requirements before accepting the bids and awarding contracts. CMS has not followed its own rules in implementing the program," said Tyler J. Wilson, president of AAHomecare. "The piecemeal remedy undertaken in Tennessee is symptomatic of the Agency's failure to grasp how the bidding process and cockeyed payment rate determination are integrally linked. It is impossible to void 30% of the bid submissions without undermining the payment rate calculation. The Agency needs to put the brakes on Round 2 and sort out the licensing irregularities in a number of states and the payment rate problems."

The bidding program has been sharply criticized since launching in nine localities in 2011. One of the major complaints is that the program allows non-binding bids, which means providers can submit unsupported low-bids that are used to calculate the prices for products and services, but the bidders have no commitment to sign contracts for the amounts of their bids. When CMS announced an average 45 percent price cut earlier this year for Round 2 of the program, many providers said they were being forced to lay off workers, close their businesses, or no longer service Medicare patients. In addition, Medicare beneficiaries reported instances where new providers contracted under the initial stage of the bidding program were undermining their health and not providing the level of service they had received previously.

In Round 2, CMS plans to expand the dangerous and defective bidding program to 91 new areas on July 1, but the lawsuit urges the court to delay that expansion. In addition, a bip
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SOURCE American Association for Homecare
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