Bidding: Will CMS get it right the next time around?

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07/24/2018

When provider David Chase first submitted bids for the competitive bidding program, his team of seven armed themselves with pencils, calculators and coffee, working every night for three weeks to understand their costs and come up with—what he thought—were sensible bids.

“We did not win a single bid—not one,” said Chase.“We’re in the metro New York area, so we could easily bid on six or seven MSAs and we lost every single one.”

The second time around, they tossed aside their calculators and ended up winning most categories in most MSAs in which they bid.

“When I say, ‘winning,’ it’s in quotes,” he said.

Like other providers I spoke with in the wake of CMS’s announcement that it was hitting the reset button on the program, Chase was heartened to hear that at least someone at the agency might finally be waking up to the problems.

“Nobody wants to admit they implemented a program that was not well-thought out and had so many flaws,” he said “It will be interesting to see what they are going to propose on a permanent basis.”

Provider Andrew Trammell says the proposed changes, like using lead item pricing, will right some of the wrongs wrought by bidding.

“It’s certainly going to fix some of the very odd pricing fee schedules we’ve had,” he said. “For example, old manual crank beds are paid more than the newer, semi-electric beds—odd things from gaming the system.”

Still, while the proposed changes are a step in the right direction, the proposed timeline of 18 to 24 months is not. While CMS figures out how to retool the program, providers need a more immediate fix.

“There’s an easy fix and that is to acknowledge that the market clearing price is an appropriate price setting mechanism,” said provider Gary Sheehan. “They can go back to the 2016 auction, use the market clearing price and have that be the reimbursement reset for Jan. 1, 2019. I don’t think there’s any excuse for them do anything short of that, at the minimum.”