Binding Bids Legislation Introduced in Senate

WASHINGTON, D.C. (Dec. 4, 2014)—Senators Rob Portman (R-Ohio) and Ben Cardin (D-Md.) today introduced the Medicare Competitive Bidding Improvement Act of 2014. The Competitive Bidding Improvement Act, companion legislation to HR 4920, which Congressmen Pat Tiberi (R-Ohio) and John Larson (D-Conn.) introduced in the House in June, is a short and simple bill that would help deter speculative bidding in Medicare contract auctions.

“Because of loopholes in the Medicare bidding process, speculative bidders were allowed to game the system,” said Tom Ryan, president and CEO of AAHomecare. “This bill will help restore accountability, alleviate artificially low prices and deter unlicensed providers. AAHomecare is proud to support Senators Portman and Cardin as they fight to bring common sense to the Medicare bidding program. All HME providers and manufacturers should immediately visit action.aahomecare.org to ask their elected Senators to support the bill.”

This legislation will make all bids binding and require proof of licensure for the next rounds of bidding. It addresses a major flaw in the program and deters speculative bidding without generating a cost. There are three main provisions in the bill:

•  Providers will need to prove licensure before they submit bids.
•  Bidders would be required to obtain a bid bond.
•  Bonds will be forfeited if the bidder declines the contract and his bid was at or below the bid price.

“Providing strong financial incentives for bidders to honor their bids, and having an outside third party financially vet bidders, will significantly strengthen the Medicare bidding program,” said Cara Bachenheimer, senior vice president of government relations at Invacare Corp. “We are grateful to both Senators for their hard work on this important measure.”

“Faced with the short lame duck session, the time is now for the home medical equipment community to unite behind this legislation,” said Robert Steedley, president of Barnes Healthcare Services Inc. and chairman of the AAHomecare board of directors. “Our national and state advocacy teams are pushing 24/7 to build support for this legislation, but Senators need to hear directly from constituents about why they should support this bill.”

“Binding bids are the most basic function of any auction,” said Jay Witter, senior vice president of government affairs at AAHomecare. “The House and Senate committees recognize this fact and are very supportive of eliminating speculative bidders.”

“This bill is a critical step in bringing much needed accountability to the competitive bidding process,” said Ann Horton, executive director of the Maryland-National Capital Homecare Association. “We applaud the House and Senate for their bipartisan action toward improving this flawed program.”

“Unfortunately, but predictably, the Medicare bid program has caused unbelievable harm in our communities,” said Kamela Yuricich, executive director of the Ohio Association of Medical Equipment Services. “Without the essential safeguards of binding bid requirements and state licensure enforcement, we’ve allowed a government program to gut the HME services industry and undermine access to quality homecare at a time when the nation desperately needs these affordable services.”

Click here to tell your elected official to support the Medicare DMEPOS Competitive Bidding Improvement Act of 2014.