Navigation Links
Experts Say Medicare's Bidding System for Medical Equipment Will Fail

WASHINGTON, Sept. 30 /PRNewswire-USNewswire/ -- Medicare's bidding program for durable medical equipment will fail, say 166 leading experts on auctions and competitive bidding systems.  

New restrictions and steeply reduced prices based on the controversial bidding system are scheduled to take effect on January 1, 2011 in nine of the largest metropolitan areas including Charlotte, Cincinnati, Cleveland, Dallas-Ft. Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, Calif.

The 166 critics, who include two Nobel laureates and numerous economics professors from leading universities, signed a letter criticizing the bid program. Their letter was delivered this week to Rep. Pete Stark (D-Calif.), who chairs the House Ways and Means subcommittee on health. Chairman Stark forwarded the letter to Donald Berwick, administrator of the Centers for Medicare and Medicaid Services (CMS).  To view the letter, go to

The experts, who do not oppose the concept of using a competitive bidding system to set Medicare prices, point out that the bidding program designed by CMS has several flaws that will prevent it from achieving the objectives of low cost and high quality:

  • The bidders are not bound by their bids, which undermines the credibility of the process.
  • Pricing rules encourage "low-ball bids" that will not allow for a sustainable process or a healthy pool of equipment suppliers.
  • The bid design provides "strong incentives to distort bids away from costs."
  • There is a lack of transparency in the CMS program that is "unacceptable in a government auction and is in sharp contrast to well-run government auctions."

The experts' letter concludes, "This collection of problems suggests that the program over time may degenerate into a 'race to the bottom' in which suppliers become increasingly unreliable, product and service quality deteriorates, and supply shortages become common. Contract enforcement would become increasingly difficult and fraud and abuse would grow… We recommend that the government fix the flaws in the current auction program and develop a new design that emphasizes the key features of successful designs. Implementation of the current design will result in a failed government program."

Many of the professors and experts who signed the letter are affiliated with major universities including Yale, Harvard, Stanford, MIT, London School of Economics, University of Chicago, University of Pennsylvania, Duke, Columbia, California Institute of Technology, and Cornell, among others. The letter states the signatories' views are their own and do not represent the views of any organization.  

The American Association for Homecare, which represents providers of home medical equipment and services, has argued that the Medicare bidding program uses economic coercion to force homecare providers to submit unsustainable bids necessary to win a contract that would permit them to continue serving Medicare beneficiaries.  The bid program is also designed to steeply and artificially reduce the number of providers of home medical equipment, which reduces rather than fosters competition. The program will severely limit patient choice of preferred providers and make it impossible for any new provider to enter the market.

The bidding system affects providers of home medical equipment and services such as oxygen therapy, respiratory devices, hospital beds, wheelchairs, and other medically required equipment and supplies used by seniors and people with disabilities in Medicare.

Organizations that favor elimination of this bidding program include the ALS Association, the American Association for Homecare, American Association of People with Disabilities, Cerebral Palsy Association of Ohio, Muscular Dystrophy Association, National Association for Home Care & Hospice, National Association for the Support of Long Term Care, National Council on Independent Living, National Emphysema/COPD Association, National Spinal Cord Injury Association, and United Spinal Association.  

In the U.S. House of Representatives, 257 legislators have cosponsored a bill, H.R. 3790, that would eliminate the bidding program. That legislation would lower reimbursement rates for durable medical equipment but would allow providers to continue competing to serve Medicare beneficiaries on the basis of service and quality.

The American Association for Homecare represents durable medical equipment providers, manufacturers, and other organizations in the homecare community. Members serve the medical needs of millions of Americans who require oxygen equipment and therapy, mobility assistive technologies, medical supplies, inhalation drug therapy, home infusion, and other medical equipment and services in their homes. The Association's members operate more than 3,000 homecare locations in all 50 states. Visit

SOURCE American Association for Homecare
Copyright©2010 PR Newswire.
All rights reserved

Related medicine technology :

1. European Experts Recommend Pregnant and Nursing Women Take More DHA - Every Day
2. Seriously Low Vaccination Rates Cause Experts to Call for Increased Immunization Before Influenza Season Peaks
3. Experts Call for Widespread Use of Memory Screenings and Emphasize Value of Early Detection of Dementia
4. Health Experts and Families Encourage Annual Childhood Flu Vaccination to Reduce Flu-Related Illnesses and Deaths in Children
5. Vical Receives NIH Grant for an Immunotherapeutic Herpes DNA Vaccine; Herpes Experts at University of Washington and University of Texas to Conduct Preclinical Development
6. Join NPRs David Ewing Duncan, Author Jessica Queller and a Panel of Medical and Legal Experts in a 90-Minute Webcast on Genetic Testing, Genomic Medicine and Breast & Ovarian Cancer
7. Heart Patients More Likely to Adopt Healthy Habits in 3-Year Program Led by Cardiac Rehabilitation Experts, Mayo Clinic Research Shows
8. Promise of Vicals CMV Vaccine Noted by Independent Experts
9. Kendle Experts to Present at the Drug Information Association 44th Annual Meeting
10. Cytels Clinical Innovation Experts Cyrus Mehta and Judith Quinlan Reveal Latest Adaptive Trial Successes at 44th Annual DIA Meeting
11. Despite Advances in the Accuracy of CT Colonography in Detecting Polyps, Digestive Health Experts Urge Patients to Consider Risks and Realities
Post Your Comments:
(Date:11/25/2015)... AVIV, Israel , November 25, 2015 ... (NASDAQ: KTOV ) (TASE: KTOV), a biopharmaceutical company ... simultaneous treatment of various clinical conditions, today announced the ... 3,158,900 American Depository Shares ( ADSs ), each representing ... purchase up to 3,158,900 ADSs. The ADSs and warrants ...
(Date:11/25/2015)... Nov. 25, 2015 Allergan plc (NYSE: ... and Rugen Therapeutics, a start-up  biotechnology company focused ... CNS disorders and funded by the F-Prime Biomedical ... entered into an exclusive collaboration to support the ... Spectrum Disorders (ASD) and Obsessive Compulsive disorders (OCD). ...
(Date:11/25/2015)... TEL AVIV, Israel , November 25, 2015 /PRNewswire/ ... firms (the "New Investors"), pursuant to which BioLight and ... in BioLight,s IOPtima Ltd. subsidiary ("IOPtima") via a private ... global commercialization of its innovative IOPtimate™ system used in ... a regulatory approval pathway process for the IOPtimate™ system ...
Breaking Medicine Technology:
(Date:11/25/2015)... MN (PRWEB) , ... November 25, 2015 , ... Finnleo, ... through Christmas Eve on several models of traditional and far-infrared saunas. , ... Nordic Spruce is the most traditional Finnish sauna wood, and Finnleo uses only European ...
(Date:11/25/2015)... ... November 25, 2015 , ... Dr. John Pierce, Medical Director at ... hair loss treatment with the Capillus272™ Pro laser therapy cap. FDA cleared for safety ... fuller hair, without the need for surgery, prescription pills, or topical foams. , ...
(Date:11/25/2015)... ... November 25, 2015 , ... For the first time, ... Two Organizations, One Beat ” campaign. The partnership between the two groups began in ... in MAP International’s cause. , MAP International was founded in 1954 and is an ...
(Date:11/25/2015)... ... 2015 , ... Dental professionals who would like to become more proficient on ... Dr. Mark Iacobelli’s Advanced Implant Mentoring (AIM) CE course. Courses will be held on ... co-founders of Advanced Implant Mentoring (AIM), Dr. Iacobelli and Dr. D’Orazio are proud to ...
(Date:11/25/2015)... IL (PRWEB) , ... November 25, 2015 , ... The ... announce a recent successful appellate decision obtained by Attorneys Francisco J. Botto and Alex ... Adcock v. Illinois Workers’ Compensation Comm’n, 2015 IL App (2d) 130884WC. , According to ...
Breaking Medicine News(10 mins):