From the House Floor: Working for accountability at CMS, protection of those facing life altering disease and disability

September 10, 2013


"Mr. Speaker, on August 22nd, the U.S. Department of Health and Human Services Inspector General, Daniel Levinson announced his decision to initiate an investigation into the Centers for Medicare and Medicaid Services (CMS) and its handling of the Competitive Bidding program for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies.

I initiated a request for the investigation on June 20, 2013, following disclosures that CMS awarded contracts nationwide to suppliers that lacked proper licensure and accreditation – clear violations of the agency’s program guidelines for participation in the Competitive Bidding program.

This so-called “competitive” bidding model is being used by the government to procure goods and services for our nation's seniors and those facing life altering disease and disability.  While CMS makes claims the Competitive Bidding program will increase market competition and lower costs, in practice, it’s shown to be anything but competitive. Over the past several years, we’ve seen the program negatively affect seniors and force small medical companies – many that are local and the only entity capable of providing quality goods and a high level of service – out of the market.
In 2011, more than 240 economists and market auction design experts wrote to President Obama concerning the flawed bidding model. The experts wrote, that “the current program is the antithesis of science and contradicts all that is known about proper market design.” These warnings have become reality over the past several years. The licensure and accreditation abuses are just the latest among a long list of program failures. 

For many of these reasons, on June 12th 2013, 227 bipartisan members of the House – a full majority - including 82 Democrats and 145 Republicans – sent a letter to CMS, outlining the critical flaws and abuses in the program, requesting that the agency delay further implementation until such issues are fully addressed and fixed.

Despite the growing number of reported abuses under the program, and strong congressional concern about the bidding design, and a long overdue need for transparency and accountability, CMS moved forward with the program in 91 new bidding areas on July 1, 2013, bringing the total to 100 areas nationwide.

While CMS has admitted to the abuses, the agency has failed to detail how these failures occurred or offer a plan for corrective action. 

With any hope, the OIG’s efforts will shed light on how these failures occurred and impose a new level of transparency at CMS and the agency’s administrators.

In the meantime, it will be up to the House of Representatives to take corrective action. With this said, I respectfully request that each of my colleagues join me in cosponsoring H.R. 1717, Medicare DME-POS Market Pricing Program Act of 2013. This commonsense measure, authored by my esteemed colleague from Georgia, Dr. Price, will apply real market principles to the highly flawed competitive bidding model.

Mr. Speaker, we owe as much to our constituents, the taxpayers, and our nation’s Medicare beneficiaries.

I yield back."