Report Shows CBO Overestimated Likely Savings of a Proposed National Competitive Bidding Program 7/22/2002
From: Julie Phillips for the Coalition for Access to Medical Services, Equipment and Technology (CAMSET), 703-535-1889, juliep@aahomecare.org WASHINGTON, July 22 -- A report released today found that Congressional Budget Office's (CBO) ten-year estimate of savings from a national Medicare competitive bidding program for medical supplies, equipment and technology, which was passed recently by the House of Representatives (H.R. 4954), could be overestimated by more than $6 billion. The report titled, "Misunderstandings and Uncertainties Overstate Likely Savings from Competitive Bidding in the Medicare DME Market" was prepared for the new Coalition for Access to Medical Services, Equipment and Technology (CAMSET) by PriceWaterhouseCoopers (PwC). It stated that the CBO projections are inaccurate because the figures do not reflect the level of uncertainty of the costs that may be incurred by the Centers for Medicare and Medicaid (CMS). An alternative set of reasonable assumptions presented by the report would reduce the CBO's $7.7 billion estimate of Medicare cost savings to about $1 billion over the ten-year period, 2003-2012. "Since the House legislation gives the HHS Secretary authority to ultimately choose the products, quality, and areas where the competitive bidding provision will be implemented, it is impossible to accurately project the costs at this time," said Tom Connaughton, president and CEO of the American Association for Homecare and CAMSET chairman. "The CBO also did not include the administrative costs that would be required to run a competitive bidding program -- which is going to be very expensive." The report suggests that the magnitude of the official estimates should be tempered by the uncertainty associated with not only the level of savings, but the quality of the equipment and services and the access of Medicare beneficiaries to those items and services. Any realistic assessment of the competitive bidding provisions included in H.R. 4954, should also take into account the authority the HHS Secretary has to implement, or not implement, competitive bidding on a selective basis by county and by DME categories. The report also suggests that the estimates of Medicare durable medical equipment (DME) savings released by CBO need to be adjusted to reflect the CBO's official estimates of changes in Medicare Part B premiums. The report states that the CBO did not take into account the following uncertainties of a national competitive bidding program, as it was outlined in the provision of H.R. 4954: -- Uncertainty about the results from only two demonstration sites -- Polk County, Fla.; and San Antonio, Texas -- which the research team warned that the results were not representative of a national level and change within one to two years; -- Uncertainty about geographic coverage that will be chosen by the HHS secretary for inclusion in the Medicare competitive bidding program; -- Uncertainty about coverage of durable medical equipment items and services which would be chosen by the HHS secretary for inclusion in the Medicare competitive bidding program; -- Uncertainty about administrative costs for the program, as CMS has not released the results from the first completed program; -- Uncertainty about current and projected spending as the estimates presented by CMS and the CBO are very different; -- Uncertainty abut quality, choice, and access to the extent that competition eliminates certain firms from the market and the number of choices available to Medicare beneficiaries would decline. The report is available on the coalition's Web site at: http://www.protectaccess.org/reports.htm Connaughton also noted that the American Occupational Therapy Association (AOTA) has joined CAMSET, and that several other organizations have expressed interest in the Coalition's efforts. The Coalition for Access to Medical Services, Equipment and Technology (CAMSET) is currently comprised of 23 consumer advocacy organizations and trade associations, and growing, who are concerned that the expansion of competitive bidding from two ongoing demonstration projects to a national policy is premature and threatens to undermine quality of care, restrict patients' choice of suppliers and service providers, stifle the development of new technology, and drive suppliers out of operation. For more information about CAMSET visit http://www.protectaccess.org Coalition members include: -- American Association for Homecare -- American Association of People with Disabilities -- Advanced Medical Technology Association -- Advancing Independence Modernizing Medicare & Medicaid -- American Occupational Therapy Association -- Coalition of Respiratory Care Manufacturers -- Coalition of Seating and Positioning Manufacturers -- Coalition of Wound Care Manufacturers -- Consortium for Citizens with Disabilities Health Task Force -- Diabetic Product Suppliers Coalition -- Health Industry Distributors Association -- Indiana Medical Device Manufacturers Association -- National Association for Home Care -- Home Medical Equipment Association of America -- Medical Device Manufacturers Associations -- National Alliance for Infusion Therapy -- National Association for the Advancement of Orthotics and Prosthetics -- National Association for the Support of Long Term Care -- National Spinal Cord Injury Association -- Paralyzed Veterans of America -- Power Mobility Coalition -- United Cerebral Palsy Association -- United Ostomy Association |