CMS may announce as early as Friday (Oct. 29) the contract suppliers for the first round of the durable medical equipment competitive bidding program, industry sources say, though other insiders suggest it “may slide” until next week and CMS would not confirm the date. A CMS e-mail to industry states that the agency is holding a Nov. 8 call with medical equipment suppliers who did not win contracts under the first round of the competitive bidding program for durable medical equipment (DME), which is an indication that CMS does not plan to postpone the round-one bid start date, sources say — even though several lawmakers are questioning the program’s design, and one House Democrat is calling for a delay to the first round.
Kansas: Medicaid to adopt competitive bidding pricing
TOPEKA, Kan. – The other shoe has dropped in Kansas.
The state Medicaid program in September notified the Midwest Association of Medical Equipment Services (MAMES) that it plans to adopt competitive bidding pricing on Jan. 1. The good news: It doesn’t look like it will apply the pricing–on average, 32% below the current pricing for nine product categories–across the board.
The way stakeholders understand it, the state plans to apply the pricing only for dual-eligible beneficiaries who have both Medicare and Medicaid coverage, and for beneficiaries who live in the Kansas City competitive bidding area.
CMS Set To Announce Round-One DME Contract SuppliersPosted: October 28, 2010
The Need For A Delay
Rep. Bruce Braley wrote to Secretary Sebelius and CMS Administrator Berwick this week advising them of the need to delay implementation of the DMEPOS competitive bidding program in light of the program’s flaws analyzed by Dr. Peter Cramton and supported by over 160 academicians. As Rep. Braley explained:
As custodians of the Medicare program charged with ensuring appropriate access, CMS has the administrative authority to delay implementation of the bid program. The Economists’ statement demonstrates the fatal flaws in the policy decisions that have been made — it demonstrates that the bidding program will simply not work because of fundamental design flaws, harming beneficiaries. Therefore, CMS should delay Round 1 of the bid program until a bid program is crafted that is consistent with Congress’ expectations, and consistent with the parameters detailed by leading experts in the field.
1/1/11: The Artificial Deadline
CMS’ January 1st start date for implementing Round 1 contracts is a timeframe of their own choosing. Moreover, it is not a hard deadline. The date is not set in statute and CMS’ website describes it as a “Target date” and noted that the “Actual date will be announced through listserv notice.”
In light of the numerous problems with the Round 1 bidding, the most recent being the delay in announcing the bid winners, CMS needs to delay the January 1st implementation date. The delay is needed, for among other reasons, because the delays in announcing the bid winners has resulted in an unacceptably short transition period for both providers and beneficiaries. To dely the date, CMS needs to do nothing more than send out a listserv announcement.
CMS Replaces Storefront Fraud with Bidding Fraud
In a very informative Home Care Magazine article reprinted below, the writer identified many of the fatal flaws in CMS’s DME competitive bidding program. CRE is accurately quoted in the article as stating that CMS has established a program that encourages fraudulent bidding since the bids are not binding (see last paragraph). Therefore, at the same time CMS is working to combat storefront fraud, they are opening the door to a new type fraud, although one that is much harder to detect. Professor Cramton and his 160+ co-signatories warned that under CMS’ bidding program, “fraud and abuse would grow.”
CRE’s Tozzi: Call in the Exterminator
From: Home Care Magazine
WASHINGTON — According to Jim Tozzi of the Center for Regulatory Effectiveness, the theory behind various types of auctions has been studied by economists for fifty years — and he thinks CMS should have studied it a little harder.
On Monday, the Washington-based regulatory watchdog organization sent a letter under Tozzi’s signature requesting that CMS postpone Round 1 of competitive bidding “until the agency’s auction rules are revised to conform with accepted [principles].”
Tozzi cited a Sept. 26 letter to Congress from University of Maryland economist Peter Cramton and more than 160 others blasting the bid program’s flaws.
CMS Cancels Meeting With Critic Of DME Competitive Bid ProgramPosted: October 19, 2010
CMS canceled a meeting scheduled for Monday with an expert on auctions about his ideas to modify the design of the agency’s controversial competitive bidding program for durable medical equipment, Washington insiders tell Inside Health Policy. The meeting was canceled as another group representing DME suppliers notified CMS Monday of a forthcoming report that is expected to detail flaws in the design of the competitive bid program. The concerns about the bidding design come as the program kick off date — Jan. 1, 2011 — inches closer.
Tapping Academic Expertise: The Academic Community Has Made A Significant Contribution to Improving the CMS Competitive Bidding Program—More is Needed
CMS is about to implement an unprecedented program dealing with the provision of medical products and services to senior citizens on Medicare. The program is the CMS Competitive Bidding program for durable medical equipment, oxygen tanks, beds, and related medical supplies.
Members of the academic community who specialize in these “bidding” programs have advised the federal government that the program if implemented as presently designed will result in an increase in prices and decrease in services.
CRE has established an Interactive Public Docket which allows all members of the academic community to participate in this important public policy issue by posting their comments on this Discussion Forum http://www.thecre.com/Forum/
CRE Letter Cites CMS’ Unprecedented Federal Violation of Auction Principles
CRE sent a letter to CMS explaining that the rules governing the DME’s competitive bidding program contained flaws not found in other government auctions. The letter also requested that CMS suspend Round 1 until they revise their bid procedures to conform to accepted auction theory. Please click here to read the complete letter.
CMS, White House Advisers To Meet With Critic Of CMS’ DME Comp. Bid. Effort
CMS officials, White House economic advisers and congressional budget experts plan to meet with a leading critic of the design of the Medicare competitive bidding program for durable medical equipment in a move that Wall Street analysts predict could lead to changes in the second round bidding, according to a Wall Street note on DME supplier Lincare. CMS had planned to release the round one winning bidders early last week but didn’t do so, and the note implies that suppliers may be reluctant to sign contracts because of the program’s design. CMS plans to enlarge the bidding program in the second round in line with a health reform mandate.