“Fix Medicare’s Bizarre Auction Program” — CMS’ DME Competitive Bidding Program Discussed on Freakonomics Blog

Fix Medicare’s Bizarre Auction Program
By Ian Ayres and Peter Cramton

Harry Truman once quipped, “Give me a one-handed economist! All my economists say, ‘On the one hand, on the other’” Often even a lone economist has difficulty making a recommendation. While true on certain matters, there are many issues where economists do agree about the right and wrong course of action. A case in point is competitive bidding for Medicare supplies.

Stark Urges CMS To Consider Suggested Changes To DME Bidding Program

CMS Competitive Bidding Threatens Higher Costs for Non-Medicare Patients/Reduced Beneficiary Access

A letter by over 160 prominent academicians shatters CMS’ claims to have conducted a credible, transparent competitive bidding program for DMEPOS.  Moreover, the letter signed by researchers from MIT, Princeton, Harvard, Stanford, Yale, CalTech, Columbia, the University of Chicago and other major institutions demonstrates that the CMS bidding program may: 1) increase health care costs for people insured by private health plans; and 2) result in insufficient Medicare beneficiary access to needed DME.

Raising Costs to Non-Medicare Patients/Threat to Supply

CMS’ DMPEOS “competitive bidding” progran may increase health care costs to patients outside the Medicare program as private health care plans cross-subsidize the Medicare program while resulting in an insufficient supply of DME equipment for Medicare beneficiaries.

Prominent Economists Destroy Theory Behind CMS DME Competitve Program

 Comments of Concerned Auction Experts on the Medicare Competitive Bidding Program 

 Submitted to Chairman Stark, Health Subcommittee, Ways and Means, U.S. House of Representatives

CMS Saves Money by Not Obeying Law

A new report by HHS’ Office of Inspector General found that CMS has not been reporting many adverse actions taken against health care providers to a central database as requried by law.  As the report explains, “Section 1128E of the Social Security Act and the implementing regulations require the reporting of a variety of adverse actions to the” Healthcare Integrity and Protection Data Bank (HIPDB) which was established in 1997.  Federal and State government agencies and health plans are required to report adverse actions taken against health care providers including DME suppliers, laboratories, and nursing homes.

AARP Betrays Seniors

In its written testimony to the House Health Subcommitte for the hearing on CMS’ DME competitive bidding program, AARP demonstrated its disregard of the views of America’s Medicare beneficiaries.   AARP embraced competitive bidding even though seniors and their families are angry, frightened and deeply opposed to the program which will terminate many Medicare beneficiaries’ access to the home medical equipment supplier of their choice.

In their testimony, AARP stated:

CRE Testimony Highlights CMS’ Lack of Transparency, Inability to Manage Competitive Bidding Programs

The Center for Regulatory Effectiveness informed the House Subcommittee on Health’s hearing on “Medicare’s Competitive Bidding Program for Durable Medical Equipment: Implications for Quality, Cost and Access” about issues including:

• The belief by many American seniors that the competitive bidding program reflected a lack of concern about their well-being by our nation’s leadership;
• CMS’ repeated refusal to adhere to statutory transparency requirements; and
• Critical failings in CMS management of other competitive bidding efforts that halted those programs.

Tozzi Testimony

House Committee Memo on DME Competitive Bidding Program Ignores Transparency and Small Business Concerns

In preparation for the House Subcommittee on Health hearing on “Medicare’s Competitive Bidding Program for Durable Medical Equipment: Implications for Quality, Cost and Access,” committee staff prepared a background memorandum.  The memo provided background information on DME and Medicare, discussed old concerns on integrity in the DMEPOS program, reviewed the history of the DME competitive bidding demonstration program and the Round 1 Bidding and provided some information about the Round 1 Re-bid results.

The staff memo did not discuss the Round 1 Rebid transparency failings that resulted in a lawsuit against the program.  Also ignored in the memo was the deep concern and fear among Medicare beneficiaries and equipment and service providers that competitive bidding will decimate the ranks of trusted home medical equipment suppliers.

CMS Refuses To Release Names Of Winning DMEPOS Bidders