New Medicare Bidding Program Posing Issues for Medical Suppliers
Some medical supply firms and economists are raising concerns about a new Medicare bidding program for medical supplies, California Watch reports.
Under the old system, firms seeking approval to sell medical supplies would submit paperwork to Medicare officials.
The new program requires firms to compete for bids to supply medical items to Medicare beneficiaries. Officials say the new program will reduce Medicare costs by $27 billion over 10 years.
Before implementing the system nationwide, federal officials launched an early rollout of the program in nine communities across the U.S., including in the Riverside and San Bernardino county region.
Medical suppliers and a group of economists have identified major problems with the new bidding program during its early implementation.
Esta Willman -- president of Medi-Source Equipment & Supply in San Bernardino County -- said the new system appears to encourage market consolidation favoring large companies that can supply medical products at lower prices.
Peter Cramton, an economist at the University of Maryland, is advising lawmakers that the new bidding approach could force out established medical suppliers, leaving patients without local firms to provide health care supplies and repair services.
Last year, Cramton and more than 160 economists sent a letter identifying problems with the bidding program, including a lack of transparency.
Response From Medicare Officials
Laurence Wilson, an official overseeing the Medicare bidding process, said CMS designed the new bidding program to award 30% of contracts to small firms.
He said the agency is "very pleased" with the early implementation of the program in the nine selected regions. According to Wilson, the program already has reduced Medicare costs by 35% in Riverside and other implementation areas compared with what the program pays for medical supplies in other regions.
Wilson said officials are planning no major changes to the bidding process before rolling out the program in larger cities (Jewett, California Watch, 5/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.