H.R. 284, Medicare DMEPOS Competitive Bidding Improvement Act of 2015, as amended

H.R. 284

Medicare DMEPOS Competitive Bidding Improvement Act of 2015, as amended

Sponsor
Rep. Pat Tiberi

Committee
Ways and Means

Date
March 16, 2015 (114th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

On Monday, March 16, 2015, the House will consider H.R. 284, the Medicare DMEPOS Competitive Bidding Improvement Act of 2015, as amended, under a suspension of the rules.  H.R. 284 was introduced on January 12, 2015 by Rep. Pat Tiberi (R-OH), and referred to the Committee on Ways and Means.

Bill Summary

H.R. 284 amends Title XVIII of the Social Security Act to require State licensure and bid surety bonds for entities submitting bids under the Medicare durable equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition program.  The bill requires entities to: 1) obtain a bid surety bond between $50,000 and $100,000 for the area for all items in the submitted bid for a product category; and 2) meet state licensure requirements for each such area.  H.R. 284 additionally sets requirements regarding the treatment of losing bidders and successful bidders that do not accept a contract.  Finally, this legislation requires the Comptroller General of the United States to conduct a study evaluating the effects of the bid surety bond requirement and report to Congress on the findings within 6 months.

Background

“Durable medical equipment and supplies include items like blood sugar monitors, home oxygen, and walkers.”[1]  The DMEPOS competitive acquisition program was intended to reduce out-of-pocket expenses for seniors.[2]  The Affordable Care Act required CMS to expand the program, and is now administered in 100 areas nationwide.[3]  The current bid process, however, is flawed and encourages low-ball bidding that can lead to market failure.[4]  Currently, supplier bids are non-binding, which allows bidders to reject a contract.[5]  Non-binding bids “encourage low-ball bids because suppliers know they do not have to actually supply the products at those bid levels.”[6]  In the latest bidding round, 10 percent of bidders did not accept them, and the rejection of contracts has led to a 45 percent reimbursement cut for suppliers.[7]  Additionally, thousands of beneficiaries have seen significant delays in receiving necessary medical supplies.  H.R. 284 would increase price transparency and promote fair competition among DMEPOS suppliers by making bids binding.  In addition, the increase in competition would create more certainty for suppliers, and ensure seniors have access to more quality products and services.

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[1] http://tiberi.house.gov/news/documentsingle.aspx?DocumentID=385283
[2] See Id.
[3] See Id.
[4] See Id.
[5] See Id.
[6] See Id.
[7] See Id.

Cost

CBO estimates that enacting this legislation would decrease budget deficits by approximately $1 million over the 2015-2025 period.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.