CBO estimates comp. bidding would save $7.7B

Sunday, June 30, 2002

WASHINGTON - A provision for a national competitive bidding program for durable medical equipment contained in a bill by the House Ways and Means Committee would save Medicare $7.7 billion over 10 years, according to the Congressional Budget Office.

AAHomecare called the estimate "completely incredulous," arguing that the number is sheer speculation because the bill contains no clear definition of what items would be covered, nor what areas of the country would be included.

The bill would authorize the Department of Health and Human Services to exempt areas from the program that are not competitive due to low population density and to exempt items and services for which the application of competitive bidding is not likely to result in significant savings. Additionally, it instructs HHS to develop quality standards for equipment and services that will add costs that cannot yet be determined.

According to the current Ways and Means Medicare bill, CMS would be required to establish a nationwide DME competitive bidding program, starting with one-third of the nation in 2004 and the remaining two-thirds in 2005. The selected bidders would be under contract with Medicare for three years.

AAHomecare says it is too soon to implement competitive biding on a national level and urges Congress to carefully examine the impact that the existing demonstration programs have had on beneficiary satisfaction, health outcomes, and the suitability of the demonstration design. HME