CMS acknowledges declining claims, but calls Cramton study “seriously flawed”

BY DAVE PARKS
The Centers for Medicare & Medicaid Services acknowledges that HME claims have declined in Round 1 biddings areas, as reported in a recent study by economist Peter Cramton. But CMS says the declines are being driven by better controls for fraud and waste, and insists there is no evidence that beneficiaries are losing services.

The CMS statement came late Tuesday in response to inquiries from HomeCare about a study published Jan. 20 by Cramton, a University of Maryland economics professor and critic of competitive bidding.

Cramton used the Freedom of Information Act to acquire data from the nine Round 1 areas on claims submitted in seven categories of HME products. He found dramatic declines—averaging about 70 percent—in submitted claims, and concluded that the declines were evidence that many Medicare beneficiaries may have lost access to HME products and services.

CMS confirmed that claims had declined since competitive bidding was implemented in January 2011, but disagreed with Cramton’s methodology and conclusions.

“CMS has now had an opportunity to evaluate Dr. Cramton’s study and has found its methodology seriously flawed, and its conclusions grossly inaccurate,’’ CMS said in a written statement. “CMS has found some decline in allowed services or paid units from the competitive bidding areas for the items subject to Round I competitive bidding. Given the lack of evidence of adverse beneficiary impacts, CMS believes this decline may underscore competitive bidding’s value as an antifraud strategy, as well as its value in reducing costs to taxpayers and beneficiaries for the competitively bid items.”

CMS said the Round 1 areas were chosen for competitive bidding because they had higher volumes of claims than other areas, an indication of fraud, waste and abuse.

“A significant decrease in allowed services following competitive bidding in these areas indicates that the program is successfully addressing the high concentration of Medicare fraud that is associated with the DME benefit and which has been well documented by the media, the Office of Inspector General, and the Government Accountability Office over many years,” according to the CMS statement.

Further, CMS said there was no evidence that beneficiaries were losing access to services.