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Defective Medicare Bidding Program For Medical Equipment Forces Severe Hardships On California Business Owners And Beneficiaries
Date:4/2/2013

are utilized by CMS to establish their unrealistic prices. "The entire process lacks transparency because CMS never discloses how these unrealistic prices are calculated," Wilson said. "This is government imposed pricing, not competitive bidding, and it is eliminating competition rather than increasing it."

More than 240 economists, two dozen consumer groups, almost 200 members of Congress and the National Federation of Independent Business have sharply criticized the bidding program. After a request from AAHomecare, the US Department of Health and Human Services Office of Inspector General (OIG) has agreed to investigate the program.

CMS has been harshly criticized by prominent economists and auction experts such as Dr. Brett Katzman , Interim Chair of the Department of Economics, Finance & Quantitative Analysis at Kennesaw State University.  "While the CMS system does involve bidding, it is far from competitive," Katzman said. "Yes, there are winners and losers, but winners are chosen based on their willingness to game the system rather than their cost competitiveness. The problem is that the CMS system entices providers to "low-ball" bid whereas a true competitive bidding system would reward providers for being cost efficient."

Throughout California, the dangerous and defective program is impacting providers, beneficiaries, and even entire communities. Here are some of their stories.

Mark Hawkins is owner of Western Rehab, a provider of mobility equipment to clients in 15 counties in Northern California. His company has stopped providing power wheelchairs and other mobility equipment to Medicare patients.

"We will no longer be able to accept any Medicare-funded beneficiaries due to the reduced reimbursement," Hawkins said. "The reduced rates do not allow for delivery time and expense to our rural customers.
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SOURCE American Association for Homecare
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