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Investigation of Controversial Medicare Competitive Bidding Program
August 28,2013
HARRISBURG- There will be an investigation into how the Centers for Medicare and Medicaid Services' handles the Competitive Bidding program for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. Representative Glenn `GT' Thompson and Representative Bruce Braley requested the investigation on June 20, following information that the agency awarded contracts nationwide to suppliers that lacked proper licenses and accreditation.

“The Inspector General’s decision to investigate CMS’ implementation of Competitive Bidding is a step in the right direction for the many small healthcare providers in rural America concerned about the impact of this program,” said Rep. Braley. “When the government picks winners in a flawed bidding system for the medical equipment business, seniors on Medicare and the small businesses that serve them lose. I look forward to reading the conclusions of the coming investigation.”

The OIG will review the process CMS used to conduct its review of state licensing requirements and to make subsequent pricing determinations for certain medical equipment items and services under Round 2 of the program. The review will include bidding areas in Tennessee, Ohio, Michigan, and Maryland, which includes a large portion of the Pennsylvania market.

On June 12, 2013, Thompson and Braley initiated a letter signed by 227 Members of Congress – a full majority in the U.S. House of Representative, including 82 Democrats and 145 Republicans – which outlined critical flaws and abuses in the program, and requesting that CMS delay further implementation until such issues are fully address and fixed.

The CMS Administrator, the agency’s top official, admitted to the misconduct, yet failed to address how the abuses occurred or offer any plan for corrective action, prompting Thompson and Braley to call for the IG investigation.

Despite the growing number of reported abuses under the agency’s licensure and accreditation review process, and strong congressional concern about the design of the bidding model and the need for further transparency, CMS moved forward with the program in 91 new bidding areas on July 1, 2013. 

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