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Medicare Beneficiaries: “Competitive Bidding” Program is on the Horizon

Posted on: August 14th, 2012 by Knueppel HealthCare Services No Comments

If you are enrolled in Medicare and if your doctor thinks you should use a walker to get around, you just go to your local medical equipment provider and get one, right?





Originally designed as a way to shave down the cost of many of the items Medicare enrollees, or beneficiaries, commonly use, the Centers for Medicare and Medicaid Services (CMS) has implemented a program that will limit where beneficiaries can get certain items. Your local medical equipment provider may not be so “local.” Only contracted suppliers are allowed to dispense certain equipment and supplies to beneficiaries.


“Competitive Bidding” is the name given to a national program making its way to Wisconsin. It has already arrived for nine metropolitan areas around the country from Florida to California to Ohio. Starting in the summer of 2013 it is slated to hit 91 more major cities and the suburban areas surrounding them. Suppliers “bid” to win contracts, but the methodology used in the selection process has been challenged.


The program has been delayed, re-started, delayed again and restarted again. Last year two Pennsylvania congressmen introduced H.R. 1041, the Fairness in Medicare Bidding Act, to repeal the competitive bidding program. Reps. Jason Altmire, D-Pa., and Glenn “GT” Thompson, R-Pa., see this program as having disastrous effects on communities and Medicare beneficiaries. At latest count, the bill has picked up more than 172 cosponsors in the House, from all but 12 states and has been assigned to a congressional committee. Read their “Dear Colleague” letter here: http://thompson.house.gov/sites/thompson.house.gov/files/HR1041-%20DearColleague.pdf

“CMS’s decision to delay round two of the competitive bidding program shows that even it acknowledges that this program is seriously flawed,” Altmire said. “The truth is that no matter how CMS tries to tweak its competitive bidding program, it will continue to be a fundamentally bad deal for our nation’s seniors and small businesses.”

“Auction and bidding experts have resoundingly agreed that the program does not work,” Congressman Thompson said.  “Delaying round two only kicks the can to a future date. While this is an indication that the Fairness in Medicare Bidding Act (H.R. 1041) is gaining momentum, we must continue efforts to educate policy makers here in Washington about the disastrous affects this program will have on our communities and Medicare beneficiaries.”

As an alternative to Competitive Bidding, industry leaders, economists and auction experts have introduced a market pricing program (MPP). The MPP, intended to be budget neutral, would establish “clearing prices” based upon supply from DMEPOS providers meeting demand or expected utilization. Besides benefiting from increased transparency, this process would allow current Medicare providers to still serve their clients using the new pricing.

Here at KHS we play be the rules and want to keep serving our clients for another 55 years. Fundamentally flawed programs like Competitive Bidding, however, threaten our ability to provide all of you with the service you’ve come to expect from us.

This 12-minute video summarizes the problems and a solution to the flawed competitive bidding program: experts from government and industry voice their concerns and propose a path forward. http://vimeo.com/26486255

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