Bipartisan legislation announced by Rep. Pat Tiberi (R-Ohio) on Friday would reform the Medicare bidding program for durable medical equipment to make it more equitable and to supply seniors with better medical equipment.
Tiberi, a member of the House Ways and Means Committee, and Rep. John Larson (D-Conn.) co-sponsored the Medicare Competitive Bidding Improvement Act. The bill would make bids from suppliers to provide durable medical equipment, prosthetic and orthotic devices, and supplies (DMEPOS) binding under the Medicare bidding program.
“The current bid process is flawed,” Tiberi said. “Auction experts agree that it encourages low-ball bidding and will lead to market failure. This bill would reduce the number of bad actors participating in the program by imposing a penalty if the supplier does not accept a contract, promoting fairness among suppliers. Removing bad actors from the process would encourage higher quality equipment, supplies and services for seniors.”
Medicare’s competitive bidding program was designed to make durable medical supplies like home oxygen systems, walkers and blood sugar monitors more affordable for seniors.
“Medicare beneficiaries deserve access to the medical products and services they need to keep them healthy,” Larson said. “A fair bidding process for suppliers will promote timely access to higher quality medical equipment for seniors and the disabled. I am pleased to work on this legislation with Rep. Tiberi and look forward to continuing our efforts to improve the bidding process.”
Under the current system, the Centers for Medicare and Medicaid Services (CMS) offers a contract to a bidder, and the bidder can elect to accept or reject the contract. Lowball bids lead to 10 percent of the contracts being rejected, a 45 percent reimbursement cut for suppliers and delays in receiving medical equipment.
The Medicare Competitive Bidding Improvement Act would require that medical suppliers put up a surety bond as a performance guarantee when bidding on contracts. If a contract is awarded to a company, the surety bond would be returned when the project is completed.