Bid debate gets competitive

Saturday, November 30, 2002

WASHINGTON – Call it Battle of the Rebuttals.

In what has turned into a spirited exchange of methodology arguments regarding the projected savings of competitive bidding, the Congressional Budget Office and the Pricewater-houseCoopers accounting firm both recently issued statements refuting the other's findings.

The fiscal entities are at loggerheads over the Medicare savings potential from a national DME competitive bidding program proposed in House Resolution 4954, the Medicare Modernization and Prescription Drug Act of 2002. The CBO projects a figure of $7.7 billion over the next decade, while PwC estimates a much lower $1 billion savings in a study sponsored by AAHomecare.

"For CBO to write a report about [how they came to their conclusion] is unprecedented," said Dave Williams, director of government relations at Invacare. "Apparently enough questions were raised in Energy and Commerce to put them on the defensive."

John Gallagher, vice president of government relations for VGM, speculated that legislation sponsors probably coaxed CBO to respond.

"There are enough questions being asked [on Capitol Hill] that CBO is feeling the heat," he said.

The September CBO letter reiterates its claim of $7.7 billion in savings, contending among other things that budget office staff used a more accurate framework than PwC with which to calculate its projections.

"PwC continues to stand by its main findings that the interpretations of official estimates of savings from competitive bidding have been subject to overstatement and misunderstanding," Director of Health Policy Economics Jack Rodgers said in a prepared statement. "Specifically, the official estimates of savings released by CBO need to be adjusted to reflect changes in Medicare Part B premiums and to account for the administrative costs of running competitive bidding programs." HME