During 2011, Medicare’s competitive bidding program saved over $200 million. Despite the savings, critics claim the program will eliminate many providers and limit consumers’ timely access to medical equipment and supplies.
Under competitive bidding, Medicare providers bid for the ability to sell nine types of medical equipment such as diabetic supplies, power wheelchairs and oxygen equipment. Only one provider per category in a geographic area can sell that product during a three-year period.
Jay Witter, a spokesman for the American Association for Homecare, says he has several concerns, especially Medicare setting prices so low that many vendors will close their doors. He says bidding areas are enormous, “a disadvantage to small providers because they have to be able to provide the item in these huge areas.” In some situations, consumers are forced to purchase equipment from a provider across the country because their local vendor lost the bid.
Consumers using multiple items may also need multiple providers. “You could be forced to go to three or four different providers, where before competitive bidding, you could choose a provider that gave you all the items,” Witter says.
In July 2013, most of the country will be under the program unless H.R. 6490 replaces it with a market pricing program. Witter says the bill provides smaller bidding areas where only a few items are bid on each year, with prices updated yearly. Any provider can sell non-bid items. Witter claims the bill is cost neutral and saves the same amount of money.
During Congressional testimony last September, Laurence Wilson, CMS director of the Chronic Care Policy Group, defended competitive bidding and addressed concerns. Wilson claims Medicare has been plagued by inflated prices and fraud and is projected to save $25.7 billion by 2022 while ensuring access to quality medical equipment. He says it’s difficult for small suppliers to furnish all product categories, but suppliers aren’t required to submit bids for all categories, and regulations also allow small providers to join together to meet the needs of an entire bidding area. According to Wilson, 51 percent of the winning bids came from small providers. Small providers are defined as those with annual gross revenues of $3.5 million or less.
The federal government will keep pushing for savings in entitlement programs, but the impact to consumers needs to be taken into consideration. As for competitive bidding, Witter encourages people with concerns about access to medical equipment to contact their elected officials. Hopefully this will lead to more efficient delivery of medical equipment while maintaining fiscal responsibility.