Laura
05-07-2008, 10:33 AM
You remember how well it worked when we had rocket componants made by the lowest bidder...
http://online.wsj.com/public/article/SB121003642419969439.html?mod=2_1566
Lawmakers Question Medicare Bidding Plan
By ANNA WILDE MATHEWS
May 6, 2008; Page A4
Members of Congress are expressing concern and scheduling hearings about a Medicare plan to use competitive bidding for products such as wheelchairs and walkers, in a sign that lobbying by medical-equipment companies is gaining traction.
Currently, companies receive a government-set fee to distribute such equipment for patients' home use. Under the competitive system, companies bid on how low a fee they would be willing to accept. Medicare then limits distribution rights for a particular geographic area to several low bidders.
An experiment with competitive bidding, mandated by a 2003 law, is starting in 10 cities this July. It is expected to expand to 70 more cities including Los Angeles and New York next year. The project involves ten categories of medical products, among them power wheelchairs, walkers, hospital beds and oxygen equipment.
Officials at the Centers for Medicare and Medicaid Services say competition could ultimately save $1 billion a year. "We know we're overpaying," said Kerry Weems, the agency's acting administrator. He said competitive bidding, combined with the initiative's quality and financial requirements for bidders, "will hold this industry accountable."
Critics in Congress and elsewhere say service for the elderly will suffer if the bidding system drives some operators out of business. "We are very concerned about a decrease in quality and access and choice of provider," says Peter W. Thomas of the Consortium for Citizens With Disabilities.
Competitive bidding could challenge medical-equipment suppliers and manufacturers accustomed to the current payment system. Though much of the market is made up of smaller companies, some larger firms are involved, including Apria Healthcare Group Inc. and Lincare Holdings Inc., which both provide home oxygen equipment and other supplies.
"I'd like to see the whole thing scrapped," says Rep. Pete Stark, the California Democrat who chairs the Ways and Means Committee's health subcommittee. He believes Congress will take action against the project. "It's just a question of whether we'll do it in 2008 or 2009," he says.
The health subcommittee holds a hearing Tuesday on the issue. Another House panel, the Small Business Committee, is planning a hearing later this month. Several members of Congress from both parties have expressed concerns in letters to the Centers for Medicare and Medicaid Services.
"There are serious flaws" in competitive bidding, says Frederick H. Graefe, a lawyer and lobbyist who represents Invacare Corp., a major medical-equipment manufacturer.
The effort to delay or stop competitive bidding highlights the challenge of trimming Medicare costs. Medicare is projected to cost the federal government about $390 billion in the 2008 fiscal year, up from $375 billion in 2007, according to the Congressional Budget Office.
The Medicare agency has said that, for the first round of 10 cities, it expects its payments for the equipment to average about 26% less than what it currently pays. Beneficiaries pay 20% of the cost of their products.
An earlier competitive-bidding experiment in two locations was found to save money and not significantly affect beneficiary access in an evaluation commissioned by the Medicare agency. "It worked in terms of driving down prices and, more importantly, in saving money for the program," says Joseph Antos, a former Medicare official now at the conservative-leaning American Enterprise Institute.
Opponents of the competitive-bidding project say implementation has been flawed, with legitimate bidders mistakenly disqualified. They argue that the project will ultimately cut down on competition. "It's going to reduce severely the number of providers," says Tyler J. Wilson, chief executive of the American Association for Homecare, which represents suppliers and manufacturers.
Mr. Weems, of the Medicare agency, says Medicare employees checked the documents for 100 companies that had been disqualified based on paperwork problems, and the disqualifications were justified. He says winning bidders had to meet quality standards.
http://online.wsj.com/public/article/SB121003642419969439.html?mod=2_1566
Lawmakers Question Medicare Bidding Plan
By ANNA WILDE MATHEWS
May 6, 2008; Page A4
Members of Congress are expressing concern and scheduling hearings about a Medicare plan to use competitive bidding for products such as wheelchairs and walkers, in a sign that lobbying by medical-equipment companies is gaining traction.
Currently, companies receive a government-set fee to distribute such equipment for patients' home use. Under the competitive system, companies bid on how low a fee they would be willing to accept. Medicare then limits distribution rights for a particular geographic area to several low bidders.
An experiment with competitive bidding, mandated by a 2003 law, is starting in 10 cities this July. It is expected to expand to 70 more cities including Los Angeles and New York next year. The project involves ten categories of medical products, among them power wheelchairs, walkers, hospital beds and oxygen equipment.
Officials at the Centers for Medicare and Medicaid Services say competition could ultimately save $1 billion a year. "We know we're overpaying," said Kerry Weems, the agency's acting administrator. He said competitive bidding, combined with the initiative's quality and financial requirements for bidders, "will hold this industry accountable."
Critics in Congress and elsewhere say service for the elderly will suffer if the bidding system drives some operators out of business. "We are very concerned about a decrease in quality and access and choice of provider," says Peter W. Thomas of the Consortium for Citizens With Disabilities.
Competitive bidding could challenge medical-equipment suppliers and manufacturers accustomed to the current payment system. Though much of the market is made up of smaller companies, some larger firms are involved, including Apria Healthcare Group Inc. and Lincare Holdings Inc., which both provide home oxygen equipment and other supplies.
"I'd like to see the whole thing scrapped," says Rep. Pete Stark, the California Democrat who chairs the Ways and Means Committee's health subcommittee. He believes Congress will take action against the project. "It's just a question of whether we'll do it in 2008 or 2009," he says.
The health subcommittee holds a hearing Tuesday on the issue. Another House panel, the Small Business Committee, is planning a hearing later this month. Several members of Congress from both parties have expressed concerns in letters to the Centers for Medicare and Medicaid Services.
"There are serious flaws" in competitive bidding, says Frederick H. Graefe, a lawyer and lobbyist who represents Invacare Corp., a major medical-equipment manufacturer.
The effort to delay or stop competitive bidding highlights the challenge of trimming Medicare costs. Medicare is projected to cost the federal government about $390 billion in the 2008 fiscal year, up from $375 billion in 2007, according to the Congressional Budget Office.
The Medicare agency has said that, for the first round of 10 cities, it expects its payments for the equipment to average about 26% less than what it currently pays. Beneficiaries pay 20% of the cost of their products.
An earlier competitive-bidding experiment in two locations was found to save money and not significantly affect beneficiary access in an evaluation commissioned by the Medicare agency. "It worked in terms of driving down prices and, more importantly, in saving money for the program," says Joseph Antos, a former Medicare official now at the conservative-leaning American Enterprise Institute.
Opponents of the competitive-bidding project say implementation has been flawed, with legitimate bidders mistakenly disqualified. They argue that the project will ultimately cut down on competition. "It's going to reduce severely the number of providers," says Tyler J. Wilson, chief executive of the American Association for Homecare, which represents suppliers and manufacturers.
Mr. Weems, of the Medicare agency, says Medicare employees checked the documents for 100 companies that had been disqualified based on paperwork problems, and the disqualifications were justified. He says winning bidders had to meet quality standards.