Competitive bidding not always a sweet deal

Published in the Trenton Times on 9/18/10

Competitive bidding not always a sweet deal

Written by Paula Hartman

I recently learned about a change stemming from the Medicare Modernization Act of 2003 that was intended to reduce costs, but in the end may drive up costs and put homebound patients suffering from diabetes at a disadvantage.

The MMA included requirements for competitive bidding with a noble goal of saving Medicare and taxpayers billions of dollars; unfortunately, the way Centers for Medicare and Medicaid Services (CMS) chose to implement it for diabetic supplies falls short of the program’s goals. The implementation for this part of the act went into effect recently.
Under the competitive bidding system, only mail order suppliers that “won” their bid will be able to receive Medicare reimbursements for diabetic supplies. While competitive bidding has an admirable goal of reducing costs, under the current parameters, it reduces Medicare recipients’ access to comprehensive quality care while not recognizing all of the potential savings of the original intent. A recent independent study by Avalere Health showed that the federal government could save $3.6 billion over 10 years if it eliminated the reimbursement differential between retail and mail providers. Congress must urge the CMS to create an even playing field for all diabetic supply providers — mail order and retail alike.

As an owner of an executive management firm, I help my clients streamline their businesses as cost effectively as possible. The implementation of this rule set forth by CMS doesn’t do this; total savings won’t be recognized, and struggling diabetic patients may lose options.

The writer is Principal of Association Business Solutions.