Forbes Covers CMS’s Bid Reforms

Economic researcher Wayne Winegarden notes bidding’s savings haven’t been sustainable and poor methodologies have caused access problems.

The reforms to competitive bidding outlined in CMS’s recently released proposed rule for ESRD and DMEPOS competitive bidding received some attention from an unexpected source this week: Forbes magazine.

In “Reforming Medicare's Competitive Bidding Program To Improve Health And Lower Costs,” Forbes contributor Wayne Winegarden, a Sr. Fellow in Business and Economics at the Pacific Research Institute and the Principal of Capitol Economic Advisors, called the original bidding program “illogical” and said it “created a new set of problems.”

Winegarden interviewed longtime critic of the bid program, Peter Cramton, Professor of Economics at the University of Cologne and the University of Maryland, who outlined the program’s flaws as well as their results: poor access to equipment, poor quality of equipment, and poor incentive for businesses to serve the program.

“By incenting uneconomical bids, the current competitive bidding program destabilizes the market leading to the aforementioned availability and quality problems,” Winegarden writes.

He notes that with the proposed rules CMS is now offering a system that determines winners through a market clearing price, and he encourages CMS to implement the rule, adding that it would encourage more realistic bidding and dissuade cheats. Ultimately this would improve access and quality, he argues, adding it would be a win-win-win for patients, providers and the Medicare program.

Let’s hope CMS listens.

About the Author

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

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