Medicare Announces Response for First Competitive Bids
CMS acting Deputy Administrator Herb Kuhn on Wednesday said that the agency received more than 6,300 bids from suppliers of durable medical equipment during the first round of a Medicare competitive bidding program, The Hill reports.
The first round includes 10 metropolitan areas. The second round, announced earlier this month, will add 70 areas, including New York, Los Angeles and Chicago regions. The program is expected to go nationwide in 2009.
The program was mandated by the 2003 Medicare law. CMS anticipates that prices set through competitive bidding will save billions of dollars for Medicare and its beneficiaries. Beneficiaries typically pay 20% of the price set by Medicare for medical equipment.
Acting CMS Administrator Kerry Weems in a statement said, "Competitive bidding means that Medicare beneficiaries will have access to these products at substantially lower costs." Kuhn said that the number of bids shows the level of interest durable medical equipment providers have.
However, some industry leaders say the suppliers are participating because they have no other choice, The Hill reports. Mark Leahey, executive director of the Medical Device Manufacturers Association, said, "There's no option here. If you're not part of the process, you're foreclosed."
Walter Gorski, vice president of government affairs for the American Association for Homecare, said that Medicare represents 35% to 50% of revenue for a typical medical equipment company. He added that the program is "anything but competitive because, at the end of the day, you're going to be eliminating people from the market" (Young, The Hill, 1/18).