Battle continues over Medicare competitive bidding program

Even as Democratic leaders are trumpeting the savings generated by Medicare's competitive bidding program for durable medical equipment (DME), the DME lobby is blasting the initiative as a threat to seniors' healthcare. 

The Centers for Medicare and Medicaid Services (CMS) on Thursday announced steep rate cuts for DME products in nine major cities around the country. The cuts, which average 32 percent, are derived from Medicare's competitive bidding program, which was installed as a part of a 2003 Medicare reform law. The idea was to move away from standard fee-schedule rates by installing market-based prices determined by competing company bids.

Democratic leaders hailed the news of the savings. 

“Today we are seeing that transparency and competitiveness in Medicare results in a 32 percent reduction in costs, just from the first stage of this program alone," Sen. Max Baucus (D-Mont.), who chairs the Finance Committee, said in a statement. "I’m very pleased with these strong results from making Medicare a more competitive and transparent purchaser and America’s seniors and taxpayers should be as well." 

The DME lobby isn't so sure. The American Association for Homecare issued a statement arguing the cuts will put DME suppliers out of business, ultimately threading seniors' access to those products.

“The program will only make it harder to receive medically required homecare," Tyler Wilson, the head of the group, said in a statement. "Over time, the country will see spending soar in other parts of Medicare because the bidding program will push spending into longer hospital stays and ER visits." 

The group has long called for a full repeal of the competitive bidding program — an idea supported by more than 250 House lawmakers, who have a bill to do just that. 

The cuts will take effect at the start of 2011. The nine areas affected are Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh and Riverside.