Medicare announces contracts for competitive bidding on equipment while docs worry about payment cuts

National Journal: "The Centers for Medicare and Medicaid Services announced today that nearly all the contracts it offered in July to companies in a competitive bidding program for medical equipment were signed by those firms, effectively shutting down criticism from academic experts who warned that companies would low-ball their bids and then never sign a contract. CMS announced 1,217 signed contracts with 356 suppliers to produce durable medical equipment for Medicare beneficiaries, which includes hospital beds, walkers and wheelchairs. The program is projected to save $28 billion for Medicare and beneficiaries over 10 years. Savings of $11 million are estimated for beneficiaries, who are responsible for making copayments for the equipment" (McCarthy, 11/3).

The Hill: "The competitive bidding program, created by the 2003 Medicare reform law, aims to save patients and the government money by replacing standard fees with market competition among providers. The program, which slashes prices by 32 percent, begins Jan. 1." It begins in nine cities. "Industry groups have objected to the program, saying its cuts are too steep for many small companies to survive. And several experts have criticized the way the bidding program is structured" (Pecquet, 11/3).

Medscape reports that the elections left "physicians wondering what a divided Congress will do about healthcare reform and Medicare reimbursement. … [L]egislative experts in organized medicine interviewed by Medscape Medical News last week warn of continued political gridlock that could frustrate efforts to achieve a permanent solution to the Medicare reimbursement crisis. Physicians face a massive cut in Medicare reimbursement on December 1, and a smaller one on January 1 that will add up to 24.9 percent, unless a lame-duck Congress later this month acts to avert it. The cuts are triggered by Medicare's sustainable growth rate (SGR) formula for setting physician pay. The Congressional Budget Office has put the price of replacing the SGR formula with one considered more equitable for physicians at more than $300 billion" (Lowes, 11/3).

ModernHealthcare: "The steep cut to Medicare physician pay is scheduled under the contentious sustainable growth-rate formula, which Congress has moved to override each year since cuts took effect in 2003 and the American Medical Association has lobbied to repeal. Congress last delayed a scheduled physician pay cut of roughly 20 percent in June and in the latest CMS rule, the agency called a long-term solution 'critical' and said officials 'are committed to permanently reforming the Medicare payment formula'" (Evans, 11/3). 

Los Angeles Times: "Paying physicians less for a commonly administered prostate cancer therapy can help curb inappropriate use and save health care dollars, without having a negative impact on people who need the treatment, according to a new study in The New England Journal of Medicine." The study looked at the use of a hormone treatment called  androgen deprivation therapy before and after Medicare officials decided to cut payments for it. "Among people for whom the treatment was considered necessary, there was no decline in use when payments were lowered. In contrast, use of the therapy fell more than 30 percent among patients for whom there is no medical evidence that it is beneficial" (11/2).