Navigation Links
Medicare Bidding System for Medical Equipment Plagued by Flaws, Delays, Lack of Transparency
Date:11/3/2010

WASHINGTON, Nov. 3, 2010 /PRNewswire-USNewswire/ -- The inherent design flaws, long overdue announcement of winners, and lack of transparency in Medicare's controversial "competitive" bidding program for home medical equipment have made it difficult for homecare patients and providers to prepare for steep reductions in the number of providers that will be allowed to serve Medicare patients.

With less than 60 days remaining before the implementation of the program, the Centers for Medicare and Medicaid Services (CMS) has not completed the contracting process. CMS is now five weeks past its September 2010 deadline for completing contracting and announcing the bid winners.

New, unsustainable Medicare reimbursement rates and a sharp reduction in providers will occur on January 1, 2011 in nine of the largest metropolitan areas in the U.S., including Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California. Another 91 areas throughout the U.S. will be subjected to the bidding program starting later in 2011.  The bidding system affects providers and users of home or durable medical equipment and services such as oxygen therapy, respiratory devices, hospital beds, wheelchairs, and other medically required equipment and supplies needed by seniors and people with disabilities in Medicare.

Home medical equipment providers in the affected regions will need to make numerous administrative and operational changes well before January 1, 2011. Those changes relate to regulations affecting "grandfathering" notifications to patients, subcontracting arrangements, and changes in company ownership. Medicare beneficiaries have received little information to date about the coming changes.

Another Study Describes the Deep Flaws in the CMS Bid System

A recent study conducted by economists including Charles R. Plott, professor of economics at the California Institute of Technology, concludes that the fundamental flaws in the Medicare bidding system will prevent any "quick fix." A draft report of the study dated October 2010 concludes that:

  • Good auction architectures for procurement applications do exist.
  • The proposed Medicare supplies auction is not a good procurement auction. It is based on an inappropriate architecture that cannot deliver services at competitive rates and qualities.
  • The Medicare supplies auction architecture cannot be adjusted in some simple way. There is no "quick fix". The two central pillars of the auction are flawed. First, the price determination by the median accepted bid is not an appropriate method for determining price. Second, the ability of bidders to cancel bids is an inappropriate guide for competitive bidding strategies.

See the full study at http://www.cramton.umd.edu/papers2010-2014/caltech-experiments-on-medicare-auction.pdf.

In fact, the design of this bidding system is so badly flawed that 166 economists and auction experts, including two Nobel laureates, have urged key congressional leaders and committees in Congress to scrap the system and start over.  See letters at: http://www.cramton.umd.edu/auction-papers.htm#Medicare.  

"Given the critical findings of the new study, along with concerns expressed by the 166 economists and by disability groups such as the ALS Association and the American Association for People with Disabilities, we're not surprised that CMS has been unable to get the program off the ground," said Tyler J. Wilson, president of the American Association for Homecare. "Moreover, reimbursements and copayments have already been cut by about 50 percent over the past 10 years and significant anti-fraud measures are already in place. So, this bidding system is really nothing more than a badly designed solution in search of a problem. Medicare patients and providers will pay a steep price if this system goes forward."

Consumer, patient, and homecare groups support H.R. 3790, a bill in the U.S. House of Representatives that would eliminate the bidding program in a fiscally responsible manner. 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 bipartisan bill has 257 cosponsors, including more than half of the Democrats and more than half of the Republicans in the House.

CONTACTS: Michael Reinemer, 703-535-1881, michaelr@aahomecare.org;  Tilly Gambill, 703-535-1896, tillyg@aahomecare.org

The American Association for Homecare represents durable medical equipment providers, manufacturers, and others  in the homecare community that serve the medical needs of millions of Americans who require oxygen equipment and therapy, mobility assistive technologies, medical supplies, inhalation drug therapy, and other medical equipment and services in their homes. Members operate more than 3,000 homecare locations in all 50 states.  Please visit www.aahomecare.org/athome.


'/>"/>
SOURCE American Association for Homecare
Copyright©2010 PR Newswire.
All rights reserved

Related medicine technology :

1. Rheumatoid Arthritis Patient Share of Actemra Projected to Exceed Patient Share of Cimzia and Simponi Among the Medicare Population
2. Mobility Matters: Power Wheelchairs Change the Lives of Medicare Beneficiaries
3. Universal American Announces New Medicare Part D Benefit Making LIPITOR® and CRESTOR® Available for Low or No Copay(1)
4. Utahs Seniors and People with Disabilities Will Feel Impact of Medicare Policy Changes that Restrict Access to Power Wheelchairs
5. As Drug Prices Rise, Seniors are Advised to Review Their Medicare Prescription Coverage
6. NCPA: Walmart Medicare Drug Plan a Prescription for Poor Pharmacy Care
7. Humana and Walmart Announce Innovative Medicare Part D Prescription Drug Plan with Lowest National Monthly Premium Offered in all 50 States and D.C. (1)
8. Experts Say Medicares Bidding System for Medical Equipment Will Fail
9. NCPA Commends Senate Aging Committee for Launching CVS Caremark Investigation to Examine Alleged Harm to Seniors, Medicare
10. MyMedicareMatters Website Expands Coverage of Critical Medicare Information
11. WellPoint Subsidiary Wins Durable Medical Equipment Medicare Administrative Contract Valued at $86.7 Million
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/24/2016)...  Arkis BioSciences, a leading innovator in the ... cerebrospinal fluid treatments, today announced it has secured ... led by Innova Memphis, followed by Angel Capital ... Arkis, new financing will accelerate the commercialization of ... of its in-licensed Endexo® technology. ...
(Date:6/23/2016)... -- In a startling report released today, National Safety Council ... comprehensive, proven plan to eliminate prescription opioid overdoses. Prescription ... are tackling the worst drug crisis in recorded U.S. history, assigned ... Kentucky , New Mexico , ... 28 failing states, three – Michigan , ...
(Date:6/23/2016)... 23, 2016 Bracket , a leading clinical ... generation clinical outcomes platform, Bracket eCOA (SM) 6.0, at ... 26 – 30, 2016 in Philadelphia , ... Outcome Assessment product of its kind to fully integrate with ... Bracket eCOA 6.0 is a flexible platform for electronic clinical ...
Breaking Medicine Technology:
(Date:6/25/2016)... ... , ... "With 30 hand-drawn hand gesture animations, FCPX users can easily customize ... Pixel Film Studios. , ProHand Cartoon’s package transforms over 1,300 hand-drawn pictures into ... Simply select a ProHand generator and drag it above media or text in the ...
(Date:6/25/2016)... Oklahoma City, Oklahoma (PRWEB) , ... June 25, ... ... to helping both athletes and non-athletes recover from injury. Recently, he has implemented ... for the Oklahoma City area —Johnson is one of the first doctors to ...
(Date:6/24/2016)... Angeles, CA (PRWEB) , ... June 24, 2016 , ... ... surgery procedures that most people are unfamiliar with. The article goes on to state ... procedures, but also many of these less common operations such as calf and cheek ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... Marcy was in a crisis. Her son ... lash out at his family verbally and physically. , “When something upset him, he couldn’t ... would use it. He would throw rocks at my other children and say he was ...
(Date:6/24/2016)... ... June 24, 2016 , ... Dr. Amanda Cheng, an ... Dr. Cheng has extensive experience with all areas of orthodontics, including robotic Suresmile ... orthodontics. , Micro-osteoperforation is a revolutionary adjunct to orthodontic treatment. It can ...
Breaking Medicine News(10 mins):