CMS bureaucrat: Competitive bidding 'scares' me

Saturday, August 31, 2002

WASHINGTON — A long-time CMS bureaucrat along with one of the fathers of home respiratory therapy have joined the chorus of those singing out against national competitive bidding for durable medical equipment.

"It scares the heck out of me," said the CMS official, who asked not to be identified. "They are talking about 240 different sites, and that would be tough to administer. And not too many people around here know anything about competitive bidding, so it would probably be expensive and take a long time to set it up."

Dr. Tom Petty, author of the influential Nocturnal Oxygen Therapy Trial (NOTT) study, called competitive bidding for home respiratory therapy "a colossal mistake."

Petty fears that if Medicare puts home respiratory therapy out to bid, winning providers, in an effort to cut costs, will opt too often for the least expensive modality, a concentrator. The result, he said, would be fewer beneficiaries receiving ambulatory oxygen equipment, which allows them to remain active and healthier.

"CMS will spend a lot of time on emergency care and hospitalization if they do that, but you can't get them to look at it that way," said Petty.

The argument that winning providers will make up in volume what they discount on price is "theoretical," Petty said.

The CMS source added that just because competitive bidding may work in Polk County, Fla., and San Antonio, doesn't mean it will work in larger metropolitan areas. CMS "cherry picked" the demonstration locations to make sure there would be plenty of suppliers and competition. By staying away from New York, Los Angeles and other urban areas, the demonstration projects, for the most part, avoided potential problems like fraud and abuse, the source said.

"In a demonstration, if something goes wrong in the midst of it, you can make an on-the-spot correction," the source said. "In a national program, people not very familiar with competitive bidding would be writing a regulation that would apply to the whole country, with just the demonstrations to rely on. It's a tough one." HME