New Medicare rules for "competitive bidding" put patients and device companies at risk.
By Catherine Burzik
The Centers for Medicare & Medicaid Services recently implemented the 2nd round of its so-called "competitive bidding" process, a system devised by Medicare to award supply contracts to providers of medical devices and products to patients in their homes.
This new round significantly expands the scope of the program to cover 50% of all Medicare beneficiaries. With this expansion, CMS will be embarking on an experiment of massive scale that could have serious adverse health consequences for about 25 million people.
CMS is claiming success on the 2nd round, having achieved, on average, a 45% reduction in the cost of life-saving medical products such as oxygen, sleep apnea products, power wheel chairs, beds, wound therapy, feeding tubes and a 72% reduction for diabetes testing supplies.
This is a Pyrrhic victory, unless CMS is trying to win a race to the bottom. And, don't be mistaken, we will reach bottom: The potential exists for less access across the country to critical medical devices and equipment, a lower quality of patient care, and ultimately and ironically, a higher cost burden on the overall healthcare system.
At first glance, competitive bidding looks like a good idea: Several bidders battling to provide a product for the most "competitive" rate. How can this not work? Because, in fact, it is not the most competitive rate, it's a very low rate chased to the bottom by low-ball bids with no binding commitments to participate in the program at the bids offered – or to deliver products or services promised in these bids.