Bid News Blog

This news site presents breaking news on the CMS competitive bidding programs. It is interactive and readers are encouraged to post stories in their names or anonymously
June 27, 2012

VGM offers re-compete seminar

From: HME News

WATERLOO, Iowa – The VGM Group will travel to the nine cities included in Round 1 of competitive bidding to give seminars on the re-compete program scheduled to kick off this fall.

During the daylong seminars, VGM’s bidding expert Mark Higley will cover all facets of the re-compete, including registering for the program, submitting bids and filing hard copy documents. He will also cover strategies and pitfalls.

Attendees will receive take-home CDs that include various preparation “tools” and checklists. The cost: $199 for the first attendee and $149 for additional attendees.

June 20, 2012

VGM raises concern about capped rental replacement ruling

From: Home Care Magazine

WATERLOO, Iowa —VGM Group, Inc., is asking providers to contact legislators and ask them to send a letter to the Centers for Medicare & Medicaid Services to stop a recent ruling. The CMS ruling, posted June 7 on the CGS Jurisdiction C DME MAC website, requires providers to replace a capped rental item if it is determined that it is incapable of lasting five years. The request for provider assistance in fighting the rule was posted on VGM’s Legislative Update blog.

June 14, 2012

Failures in Medicare’s competitive bidding system for home medical equipment revealed by Caltech study

Source: American Association for Homecare
A study published in the May issue of The Quarterly Journal of Economics finds that Medicare’s competitive bidding system for home medical equipment “fails to generate competitive prices of goods and fails to satisfy demand.”  The Quarterly Journal of Economics is published by Oxford University Press and is edited at Harvard University’s Department of Economics.The article was written by Charles R. Plott, Ph.D., professor of political science and economics at California Institute of Technology (Caltech), and two of his students, Brian Merlob and Yuanjun Zhang, who conducted a year-long study of the bidding system — or auction — that was designed by the Centers for Medicare and Medicaid Services (CMS). This auction system was designed to align Medicare reimbursement rates with market prices for home medical equipment and services such as respiratory devices, wheelchairs, and hospital beds.

Caltech summarizes Plott’s findings this way:

June 4, 2012

“the CMS auction is not a good auction. … the CMS auction cannot be easily fixed”

A new study by researchers at the California Institute of Technology, attached below, blasts CMS’ “competitive” bidding auction for Durable Medical Equipment.  The study published in the Quarterly Journal of Economics, found that CMS’ decision to use non-binding bids and median bid pricing does NOT result in competitive prices.  Of particular concern to Medicare beneficiaries and their families, the paper also found that the auction “fails to satsify demand.”  Researchers has already shown based on CMS data that utilitzation of life-sustaining home medical equipment dropped sharply under the new acquisition program.  Specifically, the paper concluded that: “The CMS auction fails to generate competitive prices of goods and fails to satisfy demand.”