Competitive bidding: What Congress is saying (and a few others) about the bid amounts

Healthwatch, the healthcare blog of The Hill, a beltway publication, ran two stories over the weekend on the bid amounts for competitive bidding. Neither spells good news for the HME industry.

At least one sentator (Max Baucus, D-Mont.) and one representative (Joe Barton, R-Texas) are hailing the, on average, 32% cut to Medicare reimbursement for nine product categories in nine cities. Baucus said:

“Today we are seeing that transparency and competitiveness in Medicare results in a 32 percent reduction in costs, just from the first stage of this program alone. I'm very pleased with these strong results from making Medicare a more competitive and transparent purchaser and America's seniors and taxpayers should be as well."

Barton said:

"I never thought anyone could justify the system where the government automatically paid a premium by skirting competitive bidding, and I'm glad to see the first signs that its coming to an end. I fought to include competitive bidding in the Medicare Modernization Act because it cuts the cost of medical equipment not just for taxpayers, but for the seniors on Medicare, too. Government works best when we listen to everybody, so I'm happy CMS was open to all sides and even happier that the outcome means that taxpayers and seniors are going to get a cost break they deserve."

Both stories mention a bill in the House, with 250 co-sponsors (actually it's 252), that would repeal the program.

Check out the comments at the bottom of each of the stories for additional insights on the bid amounts. I thought this was a good exchange (Walt Gorski is that you?):

If this does go into effect, hang on. The majority of providers will go out of business, seniors will not be able to get quality equipment, more and longer hospital stays, more life threatening situations. Higher unemployment, more landlords with empty spaces. Go Joe Barton, once again on the side of the people (NOT).BY DAN NERID on 07/02/2010 at 17:01

@Dan Nerid: how will they all go out of business? I thought that is what the free market is all about? Competition. If a provider can't provide the equipment or services, and another can, the one who can't closes down. The ones that survive will flourish? Dan, why are you using fear as a form of psychological terror, with no links, studys, or other references ? thanksBY Lloyd C on 07/02/2010 at 21:14

@Lloyd C - it's not psychological terror that Dan is putting on here - it's fact. Google competitive bidding 2008 in Miami area and see what happened the last time they tried to do this - people were not able to be released from the hospital due to lack of suppliers. Some suppliers that were awarded a contract did not even have licensing to provide the product or service. And many of your local companies WILL go out of business. Companies that do not receive a contract will not be able to participate regardless if they can afford to do the work at the prices set. They are locked out. Almost 30 PERCENT of the contracts are being given to companies that do not even have a presence in the area they want to service. So Lloyd - read up on the entire competitive bidding process - It's very evident from your comment that you simply do not understand how the process will work. And if the gov't thinks they are going to save money with this, they are dreaming. There are no requirements for time in which the winning bidders have to deliver equipment. Nowadays, a call comes in, and equipment goes out that same day or the next morning. When this starts - the only way the winning companies can afford to do this work at the reduced rates will be to schedule deliveries to different locations on a set weekly schedule. What will that mean? That a person could end up staying in the hospital for 3-4 days before the equipment they need in order to go home safely will be delivered. How does that save money?BY Walt on 07/02/2010 at 23:32

Walt. Thank you for your post. real factual arguements. this would have no real issue in the big cities i would think, but the small towns and outlining areas. In canada where I am from, the rates are pretty well set and everyone follows the same tune. in this case, universal health care would be more beneficial, no? I do agree, whoever judges the winners, needs to tighten up who wins and w hat area.BY Lloyd C on 07/03/2010 at 00:43

Liz