Competitive bidding: Savings called 'speculative'

Saturday, August 31, 2002

WASHINGTON — The bare-knuckle fight over competitive bidding has turned into a numbers game, with both sides — the HME industry and CMS — spinning mind-boggling figures to buttress their arguments.

In mid-July, an industry-commissioned report by Price WaterhouseCoopers stated that the Congressional Budget Office may have over-estimated by "more than $6 billion" savings from a national competitive bidding program for HME.

The sheer size of the numbers being tossed around — the CBO estimates that competitive bidding for HME would save $7.7 billion over 10 years — leave some shaking their heads.

"I don't think there is a true number out there that Congress is dealing with," said a provider, who requested that his name not be used. "I think its how much mud can we sling and who's credible name can you stamp on it. They stamp theirs with CBO; we stamp ours with PriceWaterhouse."

To a certain extent, that is the industry's contention. Because data from the competitive bidding demonstration projects in San Antonio and Polk County, Fla., haven't been analyzed, it's impossible to say how much national competitive bidding for HME would save.

"The CBO (figure) is speculative," said Asela Cuervo, senior v. p. of government relations for AAHomecare. "They really don't know for sure what products will be part of competitive bidding; what areas will be in competitive bidding; or what the administrative costs will be. The point of the PWC study is that if equally reasonable assumptions are substituted for the ones the CBO used, you would end up with a much lower estimate of savings."

The truth probably lies somewhere in the middle," said Dave Williams, Invacare's director of government relations.

"The point of the study is to show how little we know about this proposal," Williams said. "I'm sure there are some people who go in and present these studies as dogma, which they are. I use the studies to say, 'There is so much unknown, how can you reasonably consider using this (data)?'"

The industry's data — like that of the CBO — begs for further analysis, and that's point. Until lawmakers have a valid understanding of how much competitive bidding will save or cost and how it will impact providers and beneficiaries, it's irresponsible to move forward with a national program, says Williams and others.

But for the industry to counter government estimates, it needs numbers of its own, said David Miller, CEO of The MED Group.

"These studies are crucial," he said. "We've got to develop some of our own studies. Otherwise, it's like having a gun with no ammunition." HME