By Christina Gongaware, Contributing Writer
Reps. Glenn Thompson (R-Centre) and Jason Altmire (D-Allegheny) announced new legislation this week entitled the Fairness in Medicare Bidding Act, or H.R. 1041 in front of a standing-room-only crowd. This would serve to repeal the current bidding program which was created in 2003, and which Thompson says limits the choices of seniors in obtaining quality medical products.
The Congressmen stated that the main problem with the current system (called the Medicare Durable Medical Equipment Prosthetics, Orthotics, and Supplies competitive bidding program) is that it pushes smaller providers out of competition, thereby compromising the quality of care and products that are being offered.
“Medicare beneficiaries are entitled to high-quality, low-cost medical equipment and we intend to deliver on this promise by reforming the current bidding program,” Thompson said. “We must allow for a marketplace where seniors have quality and choice, smaller providers are competing to deliver these supplies, and I ask my colleagues to join in cosponsoring H.R. 1041.”
“CMS’s competitive bidding program limits seniors’ ability to buy highly specialized medical equipment from the local suppliers they know and trust,” Congressman Altmire said. “We have introduced legislation to repeal this misguided program at no new cost to taxpayers. I urge my colleagues to join us in passing this bill and protecting seniors’ access to the quality care they deserve.”
Many advocacy organizations are already expressing their support for the new legislation, including the ALS Association, Christopher and Dana Reeve Association and Pennsylvania Association of Medical Suppliers, among others.
Thompson is a fairly persuasive advocate for this cause. Before being elected to Congress, Thompson spent a career in health care services, including as a therapist, rehabilitation services manager and a licensed Nursing Home Administrator.
Likewise, Altmire’s experience with the health care system makes it unsurprising that he would create such legislation. He holds a master’s degree in health administration from George Washington University and previously worked as a lobbyist for 15 years for both a for-profit hospital association as well as the University of Pittsburgh Medical Center.
In 2008, Altmire was appointed to the Health Care Task Force, whose goal is to improve Americans’ access to quality and affordable health insurance. He also introduced the Quality FIRST Act (H.R. 1776,) which would implement a Medicare value-based purchasing program for hospitals, which would reward them for higher quality of care.
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5 Responses
there are some questionable practices when it comes to how medicare bidding is done and who gets the most clients, i’m glad that the companies are working to find a way to give more fair opportunities to the smaller groups.
Thompson has it exactly right and for exactly the right reasons. The fact alone that the Medicare “bidding” plan puts the world’s most inefficient bureaucracy (CMS) in charge of redefining competition should give most good-government, free-market conservatives pause. The fact that CMS accomplishes this by bullying its way into otherwise competitive markets and forcing 80-90% of mostly small, locally owned businesses out of the market and creating inefficient oligopolies should cause all free marketeers to stand up and cheer the Thompson-Altmire bill. Only a bureaucrat can believe that eliminating 80-90% of competitors from a market will give you a “competitive” result. It’s fundamental — competition requires competitors. Oligopolies created by big-government mandate may result in short term savings, but basic economics tells us that this model will result in lower quality and higher costs in the longer term.
I thought Republicans favored lower spending and less government. Yet, Thompson wants to INCREASE spending on Medicare to keep home equipment providers afloat? I guess he is only rhetorically in favor less government as long as some special interest gets a bigger handout.
Its a valid point that the government overspends on many healthcare items however I find it is partly unreasonable to think an item to be covered by one’s insurance should cost the same as purchasing an item from walmart or amazon (ie market price). The amount of time spent and licenses required, depending on the item, varies as there is a great deal of red tape. Unfortunately, it is not as simple as swiping a credit card or paying cash since more people and variables are involved to getting an item covered by one’s insurance.
Obviously there is a benefit for economies of scale (ie volume = lower prices) by having fewer suppliers however then the patient might have fewer choices. One then will argue a new provider will enter the market if they have a competitive advantage (price, service, quality, etc) however contracting decisions are still out of the hands of the provider. Take Anthem Blue Cross for instance, there dme contracting department is closed to new applicants (and it has been for each of the last three years) though a new provider which finds its prices, selection, and quality are competitive. Yet they are not free to enter to compete because they cannot obtain a contract. They have not even asked to compare or bid on prices. So I imagine the same might happen with competitive bidding as new competitive providers are unable to obtain contracts as contracting is “closed” and becomes oligopolistic.
Buuuttt, this is not to say a new pricing mechanism needs to exist as I am tired of hearing providers charging $120 for an item which only costs $20-30. At the same time patients need to start price shopping as I find its lacking. When “its free” the pricing mechansim normally directing consumers is negligible. Something needs to be done but I do not think competitive bidding is it.
Thompson and Altmire introduced legislation to END competitive bidding on durable medical equipment. Similar legislation introduced during the 111th Congress (HR 3790) was extemated by the CBO to COST taxpayers $20 billion if implemented. The government used to overpay on equipment anywhere from Medicare paid a fixed price for equipment regardless of the market price. It was so bad that the government was paying $100’s to $1000’s over the price that you or I could get for these products just by searching the internet. To get around the budget neutral requirements that the House implemented Thompson and Altmire included this in the new version: In General- Of the unobligated balances of all discretionary appropriations, $20,000,000,000 is hereby rescinded.
First off why is it the taxpayers responsibility to pony up $20 billion to subsidize equipment providers who can’t operate efficiently enough to match the lowest bid price. Second, since the federal government is borrowing forty cents our of every dollar they spend, maybe we’d be better off using any “unspent” money to pay down either this years deficit, or the $14.3 trillion dollars in debt we’ve accumulated.