• 244 Auction Experts Blast CMS’ Violation of Administration Regulatory Policy

    Nine months ago, 167 academicians sent a letter condeming CMS’ deeply flawed, non-transparent implementation of competitive bidding.  Now, almost 250 academicians have signed a new letter to the President with cc’s to OMB, HHS and the Council of Economic Advisors reporting that 

    much to our dismay—there are to date no signs that CMS has responded to the professional opinions of auction experts or taken any serious steps to fix the obvious flaws to the competitive bidding program. Rather CMS continues to recite the mantra that all is well…. 

    The letter writers explain that the situation is 

    especially distressing and unreasonable given your Executive Order of 18 January 2011 on regulation. In that order, you lay out numerous sensible principles of regulation that administrative agencies must follow. The CMS competitive bidding program violates all of the principles, especially the principles of transparency and of basing regulations on the best available science. Indeed, the current program is the antithesis of science and contradicts all that is known about proper market design. 

     The auction experts further note 

    the problems with the CMS auction grow worse upon closer inspection. The complete lack of transparency is inappropriate for a government auction. For example, we now know that CMS has almost complete discretion with respect to setting prices in a nontransparent way.  . . . it is now clear that the CMS design is not an auction at all but an arbitrary pricing process

    The Executive Order includes a provision calling for the retrospective review of regulations.  CRE has already called on HHS to include the competitive bidding in their review.   

    OMB is now facing a test.  Will enforce the new regulatory policy by demanding that CMS reform the program to comply with the President’s regulatory principles or will Executive Order 13563 become a dead letter?  It’s up to the Administration to decide whether they were serious about the Order or not.

    Attached below is the most recent letter by academicians condeming CMS’ “competitive bidding” program.


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