Second Chance for MPP

Grab it with both hands. That’s what you do when you’re offered a second chance. Right now, we have a second chance to convince Congress to enact the Market Pricing Program (MPP) as a replacement for the current competitive bidding model. But it requires immediate action.

Our opportunity comes in the form of “doc fix” legislation that Congress will likely enact by the end of February. In December 2011, Congress passed a short “patch” to delay physician pay cuts required by the Medicare Sustainable Growth Rate (SGR) formula. This two-month patch expires at the end of February. When Congress writes longer-term doc-fix legislation, that bill will be the most promising vehicle for enacting the MPP because the SGR corrective legislation is popular and is likely to pass. The debate and vote will probably occur around the time this issue arrives at your desk.

The American Association for Homecare—along with economists and auction experts who have designed market-based pricing systems—has worked hard throughout the past few months to develop and build support in Congress for an alternative to the badly-designed bidding program. In congressional meetings, we have received many positive responses to the MPP alternative—which many members of Congress wanted as an approach short of full repeal.

Flaws in the existing bidding program are well known and are creating problems in Round 1 areas. But every member of Congress needs to hear about why the program is bad for homecare and why expanding it to 91 new areas in Round 2 will cause further problems.

The argument for the MPP is compelling. The original congressional intent for bidding was to reduce HME spending in Medicare and ensure beneficiaries have access to quality items and services. But that objective cannot be met because of flaws in the design of the bidding system. The Centers for Medicare & Medicaid Services (CMS) created a system that:

  1. Does not hold bidders accountable.
  2. Does not ensure bidders are qualified to provide the products in the bid markets.
  3. Produces prices that are financially unsustainable .

MPP would require CMS to make fundamental changes to ensure a financially-sustainable program. It uses an auction system to establish market-based prices around the country. These changes are consistent with Congress’ original intent but also protect providers and beneficiaries. 

Some key components of MPP are: