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President's Budget Declares War on Medicaid Recipients

WASHINGTON, Feb. 14, 2012 /PRNewswire-USNewswire/ -- The Center for Regulatory Effectiveness reports that the President's Budget proposes to slash reimbursement to state Medicaid programs for beneficiaries who use home oxygen and other Durable Medical Equipment.  The proposed budget would cripple the ability of Medicaid beneficiaries to remain in their homes. Instead of protecting the viability of home medical care as a cost-saving alternative to more frequent hospital admittances and prolonged nursing facility care, the Budget proposes to extend a discredited payment system which is already reducing Medicare beneficiaries' access to life-sustaining care.

The Medicare program for acquiring home medical equipment program, misleadingly called "Competitive Bidding" has been discredited by Congressional and academic experts.

At a Medicare conference co-sponsored by the University of Maryland and the National Science Foundation, the Congressional Budget Office's Chief Medicare Cost Estimator explained that unless the bidding program is changed, "I think there is a high probability of failure in the near future. There is near certainty of failure sometime down the road."

Over two-hundred forty academicians including several Nobel laureates starkly warned the President that the DME Competitive Bidding program's "complete lack of transparency is inappropriate for a government auction" and that "the CMS design is not an auction at all but an arbitrary pricing process."

The economists and auction experts further warned that the Medicare program which the President proposes to extend to Medicaid "is the antithesis of science and contradicts all that is known about proper market design."

Data from a Freedom of Information Act request demonstrates that provision of essential equipment ranging from diabetic supplies to oxygen  plummeted by over 60% sharply increasing the risk of hospitalization and death – a de facto war on older Americans that the Administration is seeking to extend to lower income citizens.

The combination of increased taxpayer spending for expensive hospitalizations and in-patient care with job losses throughout the home medical equipment service and supply industry will leave increased medical costs and unemployment in its wake.

Medicaid and Medicare beneficiaries, their families and their advocates should write the Secretary of HHS to demand: 1) a moratorium on the DME competitive bidding program; and 2) that during the moratorium that the Department issue a notice in the Federal Register requesting public comment on its decision to violate the most basic principle of auctions by not requiring that the bids be binding.

SOURCE Center for Regulatory Effectiveness
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