Office of Inspector General Grants Request by Reps. Thompson and Braley for Investigation into Controversial Medicare Competitive Bidding Program

Aug 27, 2013 Issues: Healthcare

Bellefonte, PA – The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has informed U.S. Representatives Glenn `GT’ Thompson (R-PA) and Bruce Braley (D-IA) of its decision to initiate an investigation into the Centers for Medicare and Medicaid Services’ (CMS) handling of the Competitive Bidding program for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), Round 2.  Thompson and Braley requested the investigation on June 20, 2013, following disclosures that the agency awarded contracts in bidding areas nationwide to suppliers that lacked proper licensure and accreditation, as required by the program guidelines and individual state laws.

“The Inspector General’s plan to investigate CMS’ handling of the DMEPOS Competitive Bidding program is positive news,” stated Rep. Thompson. “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 among those tasked with upholding the public trust and ensuring that the promise of Medicare is upheld for our nation's seniors and those facing life altering disease and disability."

“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.