Chairman Herger, thank you for holding this hearing on Medicare’s durable medical equipment (DME) competitive bidding program.
The last time we held a hearing on this topic was in May 2008. What a difference several years can make. That hearing revealed serious problems with the implementation of competitive bidding for DME. The Health Subcommittee worked together on bipartisan legislation to delay implementation of Round I. Importantly, we didn’t just give the industry a pass. We reduced DME payments nationwide by 9.5% for all product categories that would have been in the DME demonstration, and we required CMS to revise the program to avoid missteps from the initial implementation effort.
Historically, this Subcommittee has raised concerns with competitive bidding. If we want higher quality and lower prices, we can simply implement those changes through the fee schedule and other administrative tools. I have serious concerns about using competitive bidding for other services. But purchasing equipment is a fairly straightforward transaction and I’ve been pleasantly surprised by the outcome of the Round I rebid.
Unlike the first try, we haven’t heard an outcry from suppliers around the country facing difficulties in filing applications. CMS really seems to have worked diligently to address the operational problems that plagued the initial attempt.
Not only does the demonstration appear to have been implemented smoothly, it also appears that many of our concerns about negative beneficiary effects haven’t occurred. We typically hear directly from patients or their advocates when there are problems with such a substantial change to Medicare. I can report that we have not received any beneficiary complaints with regard to this demonstration. However, we need to be cautious as we proceed toward further expansion, and remain ever diligent in looking out for negative effects for beneficiaries.
I look forward to hearing from both CMS and the Government Accountability Office today. In particular, I would like to thank the GAO for working with us to expedite release of their statutorily mandated report on the Round I rebid program. GAO’s work is the first outside audit of this demonstration, and I’m especially interested in their expert evaluation.
Our second panel will also be important. We’ll hear from several DME suppliers and a patient advocate -- all of whom will present their opinions on the DME competitive bidding program to date.
We need to be circumspect about drawing significant conclusions from this hearing. We will hear an overview of a program in only nine metropolitan statistical areas across our country. The program will expand next year to an additional 91 areas. While Round I impacts 6 percent of Medicare’s beneficiaries, Round II will increase that to more than half of all Medicare beneficiaries. That’s a substantial increase. While the evidence appears to indicate that CMS can expand this program -- while protecting beneficiary access to care, saving money for beneficiaries through lowered cost-sharing, and recouping savings for taxpayers through lower overall Medicare spending -- continued close scrutiny is necessary.
DME is an important benefit. It enables people to remain in the community and out of institutions. We have a duty -- to Medicare beneficiaries and to America’s taxpayers -- to ensure that we maintain access to quality care at the best price available.
With that, I yield back the balance of my time.
