Round 2 Pricing Commentary: Cara Bachenheimer, Invacare Corp.

ELYRIA, Ohio, Feb. 1, 2013—Late Wednesday afternoon when CMS announced the bid rates, you could almost hear a massive collective gasp of disbelief sweep across the country. One of the key things that these extraordinarily low bid prices demonstrates is that the 244 auction expert economists have been proven correct: CMS’ ill-designed bid program only incentives extremely low ball bids, because it’s a “do or die” situation for the bidding HME provider. Combine that with the other fatal flaws of the current bid program: non-binding bids, median pricing rule, composite bid rule, and complete lack of transparency, and you have the model of a program destined to fail. The only positive thing coming out of the bid price announcement is it should inspire the entire HME community, all stakeholders, to take our case to Capitol Hill in the most vocal and serious effort ever. We must demand that Congress replace this fatally flawed program with an auction design that fosters competition, not destroys it. Visit the Invacare website at www.invacare.com.