It will likely not surprise Montanans that there is a growing gap of common sense between Washington, D.C., and the Big Sky state.
The most recent example is called “Competitive Bidding of Durable Medical Equipment,” designed and implemented by the federal agency that runs Medicare, the Centers for Medicare and Medicaid Services.
I co-authored the legislation that gave CMS the authority to use its buying power for competitive bidding, and I want Montanans to know that both Republicans and Democrats believe the federal government can use market forces to get the best price with good quality.
But this CMS-designed program fails to do this. I owe Montanans relying on Medicare an explanation for why there will be increasing difficulty getting the medical services and devices required to manage chronic disease or disabilities. These are prescribed by a doctor specifically to help you maintain independence with dignity. I’m sure you know seniors and disabled folks who need diabetic test supplies, oxygen, enteral nutrients, CPAP devices, walkers and wheelchairs to maintain their independence.
But CMS designed a program that empowered the bureaucrats, and not the market, to select winners and set a price. Most suppliers CMS “picked” are hundreds and even thousands of miles away from the seniors and disabled needing services, and I have learned many don’t even hold the necessary state licenses.
This design puts our seniors, including Montanans, at great risk as you lose reliable access to the prescription products and services that help manage chronic illnesses. It also endangers the Medicare Trust Fund with the cost of more hospitalizations and emergency room visits.
Take diabetes supplies for just one example. CMS decided to reduce the price 71 percent, in mail order and about 80 percent at retail pharmacies. So Montana pharmacies are immediately having to limit supplies severely or simply not accept Medicare payment, so seniors then have to pay 100 percent!
How did the wheels come off the CMS competitive bidding bus?
First, CMS, unlike any other government program in the U.S. or world, does not require binding bids. Can you imagine attending an auction, raising your hand, and not being accountable for your bid? CMS just incentivizes “cheap talk,” providers bidding low for lots of contracts to sell what they can and walk away from the rest.
Second, CMS does not require performance by winners. The contract gives “the rights” to a market but no teeth to ensure the seniors and disabled actually get the service. Can you imagine the state of Montana contracting with a distant company to build a road, with no deposits or bonds to ensure the road actually gets built?
Third, the CMS system pays half of the “winners” less than their bid – in other words, less than their costs. All the experts say this kind of rule has created fraud and abuse in other countries.
Fourth, CMS eliminates over 80-90 percent of local companies from Medicare. Many served their communities 20 or more years. Instead, CMS gave thousands of contracts to a few businesses with no local presence. Like one that currently serves 18 seniors but was given contracts for 82 cities, spanning 40 states! Another with two stores won 623 contracts nationwide. This defies logic, and fairness.
CMS has ignored repeated warnings by nationally known experts – 244 of them, including four Nobel prize winners – that the program will fail and harm seniors. And CMS suppresses the specific information that congressmen need to evaluate and judge the program’s frontline impact.
Last month, 227 Democrat and Republican members of Congress – a bipartisan majority – asked CMS to delay implementation to review and address the problems and ensure seniors can maintain their independence. Otherwise, local businesses will be needlessly closed and caring people thrown out of work.
I join with these 227 Democrats and Republicans to urge Sens. Max Baucus and Jon Tester to require CMS to delay this flawed program before it’s too late. Only then can Montana seniors and disabled be assured access to the medically necessary equipment and services we have promised you.
Nancy L. Johnson represented Connecticut as a former member of the U.S. House of Representatives, where she served as chair of the U.S. House Ways and Means Health Subcommittee. She is now a senior public policy advisor for Baker, Donelson, Bearman, Caldwell & Berkowitz in Washington, D.C.