H.R. 1041 Co-Sponsor List Tops 80, as Competitive Bidding Criticism Continues

The list of co-sponsors for H.R. 1041, the bill to repeal Medicare's competitive bidding program, now has more than 80 co-sponsors.

The bill has strong bipartisan support and has steadily gained co-sponsors since being introduced March 11 by Rep. Glenn Thompson (R-Pa.) and Rep. Jason Altmire (D-Pa.).

As of April 19, H.R. 1041 had 83 co-sponsors, according to NAIMES and the American Association for Homecare (AAHomecare). Click HERE to see the entire list of representatives who've given their support to the bill.

Support for the bill is more proof that concern over competitive bidding is growing rather than fading, despite repeated assertions from the Centers for Medicare & Medicaid Services (CMS) that round 1 of the program is operating smoothly.

At its April 5 Program Advisory & Oversight Committee (PAOC) meeting, however, CMS announced it was delaying implementation of the second round of competitive bidding till summer 2013.

PAOC members received an April 7 letter from economist and auction expert Peter Cramton, Ph.D., a professor at the University of Maryland, that strongly criticized the design of Medicare's competitive bidding program. Cramton condemned the program as "not an auction at all, but an arbitrary pricing mechanism." Cramton attended the April 5 PAOC meeting, where he met with some PAOC members, then issued a letter two days later after he said he was asked by members to put his comments in writing.

At the PAOC meeting, Cramton said in his letter, "We learned from presentations by CMS that the train wreck predicted by auction experts and others has not yet occurred. The program was implemented in nine regions beginning Jan. 1, 2011. Part of the reason is that it takes some time for inventories to run out, for companies to go out of business, and other indicators of failure to appear. Ninety days is too short a time to see the impact of a poor market design, especially given the grandfathering rules for continued service."

Cramton cited program design flaws including non-binding bids, median pricing and "arbitrary pricing through manipulation of quantity by CMS" as reasons that "No (auction) expert thinks that CMS is doing this right!"

He called the program "fatally flawed" and added to PAOC members, "Despite the absence of a train wreck in the first 90 days, please do not sit back and conclude that all is well." Cramton alluded to a design problem with California's electricity market years ago, saying, "the market appeared to work perfectly for more than two years before the market was stressed in late 2000 and crashed in crisis in 2001. The poor market design cost California tens of billions. The stakes are even higher here."

In an address to providers gathered at last week's MED Group National Business Meeting in Las Vegas, AAHomecare CEO/President Tyler Wilson described H.R. 1041 as a "clean repeal" of competitive bidding. He added that the PAOC "has not been convened in any meaningful way" thus far.

"Here's the challenging news," Wilson told the assembled providers in Las Vegas. "One word: Senate." He said currently, the industry needs a senator to introduce the bill. While Wilson believes senators would be willing to support a bill to repeal competitive bidding, he says it's been a challenge to get someone to introduce the bill because "no one wants to get crosswise with Max Baucus (D-Mont.)," the chairman of the Senate Finance Committee. The Senate Finance Committee has jurisdiction over the Medicare and Medicaid programs.

Wilson also said the HME industry needs to come to a consensus about what to do if competitive bidding is indeed repealed.

About the Author

Laurie Watanabe is the editor of Mobility Management. She can be reached at lwatanabe@1105media.com.

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