Bloomberg News: Competitive Bidding for Home Medical Equipment Cuts Business by 85%

The new competitive bidding system mandated under the Centers for Medicare and Medicaid Services (CMS) for home medical care equipment saved roughly 42% on Medicare spending in its first year. Launched as a pilot program in nine states, the new process is being touted as a success by some, says a Bloomberg Government analysis.

The program’s critics, including about 100 academic auction experts express two main concerns: first, that the bids are non-binding, and second that the set price is not a clearing price. The business impact, too, is stark: the Government Accountability Office reported a reduction of suppliers able to do business in those nine markets fell from 2,300 in 2010 to just 365 in 2011—a reduction of 85%.

While the bidding process is currently being used for home medical equipment, or about 1.5% of Medicare spending, the system does have widespread implications, Bloomberg reports, in that CMS could potentially implement this program in other sectors.

Written by Elizabeth Ecker

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Elizabeth Ecker
Director of Content at Home Health Care News
Curious about all things, when not writing about senior housing topics, Liz is an avid explorer of food. She loves trying new recipes, new restaurants and new ice cream flavors. (Current favorite: Goat cheese with red cherries.)

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