MPP Explainer

After many years of rigorous efforts to repeal the Medicare DME competitive bidding program, it has become painfully apparent that Congress lacks the will to end the program. Industry leaders — including the American Association for Homecare, VGM, the MED Group, NAIMES, CSI and state associations — have therefore developed a constructive alternative. It is built upon a model created by a group of 244 economists. Industry leaders modified that model to better accommodate smaller providers and preserve their ability to compete. This is an explanation of the industry’s legislative proposal, “The Medicare DMEPOS Market Pricing Program Act of 2011.”

The proposed legislation would replace the Medicare DMEPOS competitive bidding program with a market pricing program (MPP) based upon economic principles that are embraced by hundreds of economists who are auction experts. (Economists use the term “auction” interchangeably with “competitive bidding.”) The market pricing program would be implemented on the same timetable and apply to the same DMEPOS product categories as the existing competitive bidding program. MPP is intended to be budget neutral. 

Expert Design and Monitoring

Under the proposal, the secretary of the federal Department of Health and Human Services (HHS) would contract with an experienced and independent auction expert to design and implement the MPP, and an experienced and independent market monitor to ensure the program’s operational integrity. The auction expert would develop a draft auction design, and the HHS secretary and auction expert would convene a design conference. It would include all stakeholders, including Medicare and other federal authorities, DMEPOS suppliers, beneficiaries and the DMEPOS Competitive Bidding Program Advisory and Oversight Committee. The conference would be recorded and available through the Internet, and the HHS secretary and auction expert would publish the final MPP design. There would be an appeals process for providers.

To assure MPP transparency, the following information would be publicly available:
• All financial and other qualifications for bidders
• Eligible market areas and categories to be auctioned
• Protocols and timing for the auction
• Methodology for setting prices or transferring those prices to other areas outside the auction