CBO Sets Tab for Competitive Bidding Repeal at $20 Billion

WASHINGTON — The Congressional Budget Office has set the
10-year cost to repeal competitive bidding at $20
billion, the American Association for Homecare reported late
Friday.

According to the AAHomecare update:

“This latest savings attributed to the bidding program is based
on the bid results from the new Round 1. The $20 billion compares
to [the] $9.6 billion savings figure that the CBO had calculated
based on the initial bids offered in 2008. The savings the CBO
calculates the bidding program will generate is the same amount
congressional offices will assume must be offset in any effort to
repeal the program.”

H.R. 3790, the bill the industry is backing to repeal the
bidding program, would replace it instead with a series of
reimbursement cuts and other measures. But introduced last fall,
the bill’s pay-fors were based on the CBO’s original $9.6 billion
figure — and under Congress’ pay-go rules, the proposed
legislation must be budget-neutral.

Still reeling from recently announced Round 1 bid rates that
average a 32 percent cut, some stakeholders had doubts the industry
could afford to pay its way out of the $17 billion CMS has now
estimated Medicare would save over 10 years from the bid
program.

The new CBO score is higher still.

“AAHomecare is evaluating the impact of this latest information
from CBO but it is clear that the $20 billion figure highlights
more than ever the need for greater transparency in CMS’s
determination of the current bid rates,” the Friday afternoon
update continued. “The Association has significant concerns that
CMS has relied upon illegitimate bids and has offered contracts to
some unsound providers and they are using the results of a faulty
process to help stoke the savings that CBO has calculated for the
bidding program.

“AAHomecare believes it is imperative that CMS release the list
of providers, product categories, and corresponding competitive
bidding areas for those bids that were used to determine the single
payment amounts in the nine bidding areas. Only then will the home
care industry and Congress be able to assess the validity of the
newest CBO finding.”

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