Medicare Competitive Bidding Program: Designed to Fail

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Abstract

A recent study by the National Minority Quality Forum (NMQF) reported the failures and adverse health outcomes of the Medicare competitive bidding program as implemented by the Centers for Medicare & Medicaid Services (CMS) in 2011. CMS has repeatedly reported that the program caused no disruption of beneficiary access to needed medical products (including diabetes testing supplies) and that no adverse outcomes occurred. Although signals of disruption were seen early in the program implementation, economic modeling by McGeary and Katzman in 2004 demonstrated that the program design was significantly flawed. This article discusses the unintended consequences of competitive bidding program and provides a rationale for suspending the program until CMS can implement effective monitoring protocols to protect the safety of Medicare beneficiaries.

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