Cramton study now available on “startling and dramatic” data from Round 1 of competitive bidding

A 165-page, groundbreaking study of data from Round 1 of competitive bidding is now available. Peter Cramton, a University of Maryland economist who for years has served as an unofficial, academic watchdog examining the Competitive Bidding Program, used the Freedom of Information Act to acquire data from Round 1 of competitive bidding, and then analyzed the information.

He found a sharp decline in claims for HME products in Round 1 bidding areas, and rising risks of death and hospitalization among Medicare beneficiaries not getting necessary home medical equipment. Crampton’s report is now available on his website.

“The startling and dramatic numbers from Round One underscore the fact that the current competitive bidding program is dangerously flawed and must be stopped,” AAHomecare said last week in releasing a summary of Cramton’s study.

The Cramton analysis found that claims for these HME product categories declined between 2010 and 2011 by these percentages: :
•       Complex rehab: -82.1 percent
•       CPAP devices: -63.7 percent
•       Diabetic supplies: -74.1 percent
•       Enteral nutrition: -65.0 percent
•       Hospital beds: -63.7 percent
•       Oxygen: -61.7 percent
•       Standard power: -81.5 percent

Additionally, Cramton looked at the increased death and hospitalization risks for Medicare beneficiaries who were eligible for HME products but not using them. He found that non-users of mail-order diabetic supplies had 106 percent higher risk of death than users and a 36 percent higher risk of hospitalization. Non-users of oxygen in the “narrow access group” had a 79 percent higher risk of death and a 54 percent higher risk of hospitalization compared to users.

HME industry leaders have warned Medicare and Congress repeatedly that the competitive bidding program would make access to medical equipment and services more difficult for Medicare beneficiaries. Medicare officials, however, have insisted that the competitive bidding program is an overwhelming success, saving the government money, with few or no problems. Medicare is now expanding the program from its original nine metropolitan areas in Round 1 into 91 more metropolitan areas, or about 75 percent of the nation, in Round 2.