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Congress votes for higher Medicare costs when voting down competition

Congress is bowing to pressure (read: financial contributions) from medical equipment makers that stand to lose money if Medicare expands its competitive bidding program.

The NY Times reports today that the House approved legislation Tuesday that would delay the launch of the competitive bidding program for 18 months — all to appease a few companies that are scared of staying viable in, gasp, a competitive market.

The results of the pilot bidding program show this is good policy that will save Medicare and individuals money. The Times reports:


"When Medicare awarded competitively bid contracts to some 325
companies to serve the 10 metropolitan areas, it reduced equipment
prices by 26 percent on what it would have paid for the same equipment
under the current fee schedule. That means that if the contracts were
allowed to proceed, beneficiaries would save 26 percent on their
co-payments. Medicare would save $125 million the first year and as
much as $1 billion a year if the program went nationwide."

Yet, good policy may lose this battle.

As NY Times columnist David Leonhardt and an accompanying editorial aptly point out, this small battle is ominously prophetic of the impending battles over health care reform.

"By standing in the way of this competition, Congress is really standing up for higher health care costs," Leonhardt wrote.

It will be interesting to see which Congressmen and women vote against competitive bidding now and then assail the rising costs of health care from the podium this fall.

For the cynical out there, this is a reminder of what you already know.

As industry veteran Brian Klepper told me yesterday, "Only innocents and little children think health care reform is going to happen through policy. It’s not going to happen because half of all the money is unnecessary and because Congress is on the take."

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MartinMichael ReinemerPeterJCbob Recent comment authors
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Martin
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Martin

Press Release George Will Column Is Misguided in Touting “Competitive Bidding” as a Medicare Solution Controversial Bidding Program Is Actually Anti-Competitive and Lowers Quality of Care and Access to Care for Seniors and Disabled ARLINGTON, VA, January, 8, 2009 – A congressionally mandated “competitive bidding” initiative for home medical equipment – already the slowest-rising cost in Medicare – intended to reduce homecare costs will only succeed in reducing the quality of, and access to, care for patients and will drive up costs elsewhere in Medicare. Washington Post columnist George F. Will’s recent column on healthcare overlooks the inherent flaws in… Read more »

Michael Reinemer
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This post simply mirrors the bad information the NY Times ran. Nowhere does it mention that fact that taxpayers will save more than a billion dollars because the industry agreed to a large reimbursement cut to pay for the delay required to fix the bidding system, which is rife with flaws and which decimates the ranks of good, accredited providers who have served their communities for decades. Rick’s comments are also off base. The accreditation requirement designed to stem fraud remains in effect, and the industry has been aggressive about insisting on better efforts to root out fraud. Competitive bidding… Read more »

Peter
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Some awards for complex rehab ( complicated wheelchairs )were awarded to companies that have never done this type of work before. http://pharma21.com Is that who you want supplying products to patients?

JC
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JC

I happen to know that thanks to the “Competitive Bidding” program merely opens the door to substandard care for the people that need it the most. Since July 1st there have been several patients that have been hospitalized due to their inability to receive proper treatment because this program takes the power of choice away from the patients. The companies that won these bids are smaller companies that will be unable to meet the demands of the thousands of recipients. When they overturned the Competitive Bidding it was in the best interest of Medicare recipients. Would you send your parents… Read more »

bob
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bob

I am a DME dealer in Tampa, fl. If you look at the bidding for Orlando and Miami in round 1 it stinks with bad judgment. A dealer in Ohio won an oxygen contract in Orlando and doesn’t even have a presence in Florida. Some awards for complex rehab ( complicated wheelchairs )were awarded to companies that have never done this type of work before. Is that who you want supplying products to patients? I believe as most in congress are saying that it is a good idea but poorly implemented. This idea came from the VA. Unfortunately the VA… Read more »

Rick
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Rick

GMS is a little right, but not much. This legislation would have rooted out enormous amounts of fraud and waste from the DME and home-health sectors. And make no mistake, those two sectors are currently the most vulnerable to fraud under current purchasing structures. The newspapers in every market around the country are filled with stories of the latest prosecution of a DME or home health provider who was caught scamming the system, often to the tune of 6 and 7 figures, and the assessment of those whose job it is to target fraud is that we are only scratching… Read more »

GMS
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GMS

Just because CMS decided to play a propaganda game and call this program “Competitive Bidding” does not mean it represented or created a competitive marketplace. It stands to drive out quality, reduce access, and marginalize the homecare sector, which should be incentivized in light of the reduced costs associated with homecare relative to the alternatives. What looks like a concession actually gives another 9.5% cut to a sector that has been decimated by cuts over the past 10 years…a look at pharma, hospital, and physician payments relative to homecare would be in order if you wish to craft a balanced… Read more »