CMS: Competitive Bidding Is Working

Agency claims the program is maintaining access and care quality, while saving significant sums.

CMS announced the new single payment amounts and began sending 2017 contract offers for Round One of competitive bidding, and as it did so, it doubled down on its messaging that the program was maintaining patient access to quality care.

“Prior to the DMEPOS Competitive Bidding Program, Medicare paid for these DMEPOS items using a fee schedule that is generally based on historic supplier charges from the 1980s,” a statement from CMS read. “Numerous studies from the Department of Health and Human Services Office of Inspector General and the Government Accountability Office have shown these fee schedule prices to be excessive, and taxpayers and Medicare beneficiaries bear the burden of these excessive payments.”

Since implementation of Round One of competitive bidding on Jan. 1, 2011, CMS said it has saved approximately $220 million per year in the nine Round One metropolitan statistical areas (MSAs) due to competitive bidding and other CMS fraud, waste, and abuse initiatives. The agency added that health monitoring data indicated that the program implementation is “going smoothly with few inquiries or complaints and no negative beneficiary health outcomes.”

This would fly in the face of various rural providers impacted by the 50 to 60 percent cuts due to national bid expansion that have stated they are either considering no longer serving Medicare patients, or have already stopped serving those patients.

“CMS’ statement today asserting that the bidding program isn’t affecting beneficiary access flies in the face of both common sense, as well as what we’re hearing from home medical equipment providers, hospital discharge planners, and HME patients across the nation,” said AAHomecare President and CEO Tom Ryan. “Other CMS pronouncements of this type haven’t stood up to the test of time, such as their original assertion that unlicensed bidders taking part in the program wasn’t a problem.  

“However, just a few months ago, the HHS Office of Inspector General confirmed that significant numbers of unlicensed providers had, in fact, taken part in in Round Two of the bidding program in several states that license HME,” he continued. “Time will also tell how well today’s claims by CMS hold up. … Fortunately, Congress is becoming aware that these cuts are just too severe for rural providers to bear, and the HME community strongly supports their efforts to pause these deep cuts so we can get a better look at their true impacts on patients.”

CMS’s announcement appeared to be timed with the industry’s efforts to advance reforms to the national bid expansion, according to John Gallagher, vice president of government relations for VGM Group, who noted that this is not the first time CMS has scheduled the release of such a statement 

“In the immortal words of Ronald Reagan, ‘There you go again,’” he joked. “As soon as we get close to getting something worked out, or Ways and Means is talking to the Senate, CMS knows it, engages the propaganda machine, and they do a data dump.” 

That said, Gallagher said he believes that lawmakers are getting wise to the timing of such announcements. Gallagher noted that VGM regularly receives calls from providers in rural areas that are opting to stop taking on new Medicare patients and go cash only.

“It’s setting up a two-tier system,” he said, “those with money, and those without. And unfortunately, most patients in rural areas don’t have the money.

“Particularly in rural America, seniors don’t have money, and so they’ll just choose to go without,” he continued. “And in the end that costs the government more money, because they patients have to be readmitted.” 

More details on the Round One SPAs and contracts for 2017 can be found at Current contracts expire on Dec, 31, and the 2017 contracts last from Jan. 1, 2017 to Dec. 31, 2018.

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on LinkedIn at and on Twitter at @postacutenews.

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