Fact vs. CMS Fiction

The American Association for Homecare has fielded more than 300 complaints about the "competitive" bidding program from Medicare beneficiaries — not to mention hundreds more from providers, hospital managers and clinicians. So it's hard to believe Medicare officials' claim that out of 54,000 "inquiries" about the bidding program, they have only fielded 43 complaints, or "virtually none." Yet that's exactly what they recently told congressional staff.

Proponents of the bidding system have used distortions, misstatements and red herrings to confuse and mislead. Let's set the record straight:

Myth #1: Medicare overpays for home medical equipment and services, and the bidding system improves price-setting.

Reality: Proponents of bidding use out-of-date reimbursement rates and false comparisons to argue this case. For years, CMS has set reimbursement rates for HME through a fee schedule. Over the past decade, those rates have dropped nearly 50 percent because of cuts mandated by Congress or imposed by CMS. The costs of delivering, setting up, maintaining and servicing medically required equipment in the home are obviously greater than the cost of merely acquiring the equipment alone.

Moreover, 167 economists and auction experts warned Congress last October that Medicare's bidding system has four fatal flaws: 1) The bidders are not bound by their bids, undermining the system's credibility; 2) pricing rules encourage "low-ball bids" that will not allow for a sustainable process or a healthy pool of equipment suppliers; 3) the bid design provides "strong incentives to distort bids away from costs;" and 4) the lack of transparency in the bidding program is "unacceptable in a government auction and contrasts sharply with well-run government auctions."

Myth #2: The bidding program will make health care more cost-effective.

Reality: The home is already a highly cost-effective setting for post-acute and long-term care. For years, HME providers competed in Medicare on the basis of quality and service to facilitate the hospital discharge process and enable patients to receive cost-effective, high-quality care at home. Home medical equipment is an important part of the solution to the nation's health care funding crisis.

Myth #3: The bidding program will eliminate fraud.