Economists find flaws in DME competitive bidding

Pete Stark, D-Calif., chairman of the House Ways and Means Committee, is asking CMS Administrator Donald Berwick to consider making changes to the agency's competitive bidding process for durable medical equipment. Over the summer, CMS announced it would cut reimbursement an average of 32% for certain durable medical equipment categories under the first round of its competitive bidding program (1"The Gray Sheet" July 5, 2010). In a Sept. 28 letter to Berwick, Stark forwarded a Sept. 26 letter signed by 166 economists, computer scientists and other experts on auction practices who expressed concerns with the Medicare competitive bidding program. While the experts said they believe competitive bidding can be effective, they called for fixes. For example, they suggest, bids should be binding commitments to help weed out low-balling bids. "Successful government auctions emphasize transparency, good price and assignment discovery, and strategic simplicity," the group wrote