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Experts Say Medicare's Bidding System for Medical Equipment Will Fail
Date:9/30/2010

, 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, Nationa
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SOURCE American Association for Homecare
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