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house Bill H.R. 284

Tightening Up The Rules For Bidding On Medicare Equipment Contracts

Argument in favor

This legislation would make the Medicare bidding process more transparent, and prevent bidders from submitting predatory low-ball bids. It also protects Medicare beneficiaries and taxpayer dollars.

Brandon's Opinion
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03/16/2015
Ideally we need to get private vendors and contractors out of the medical industry entirely. Until that happens though, we can at least reduce the number of private companies making money off of taxpayers through predatory bidding practices.
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JonRunyan's Opinion
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04/11/2015
Let's make it a true bidding process and not a total shell game.
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B.R.'s Opinion
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04/22/2016
This would definitely stop the games played and rightly so.
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Argument opposed

Requiring vendors to fulfill their bids could discourage some vendors from bidding in the first place, which may in turn affect the amount of medical supplies available through Medicare.

Cary's Opinion
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04/08/2015
Requiring a bond to make a bid puts an unnecessary hurdle in an otherwise competitive environment.
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Lea's Opinion
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03/16/2015
My concern is that requiring a bond in order to submit an equipment bid would stifle innovators and smaller companies from offering or providing products in the name of "transparency" in the process.
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Carol's Opinion
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03/20/2015
Vendors should be required to fulfill their bids and government needs someone honest to oversee.
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What is House Bill H.R. 284?

This bill would  impose new requirements on private firms that are bidding to supply medical products through Medicare. Through amendments to the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition program through Medicare, this bill aims to avoid low ball bids on Centers for Medicare and Medicaid Services (CMS) contracts. 


Currently, bids for CMS contracts are non-binding — meaning that bidders can bid for the sake of participating, and if their bid is chosen they won’t have to supply the products at that price level.


If passed, this bill would prohibit the Secretary of Health and Human Services (HHS) from accepting a bid from a supplier unless it:

  • Meets state licensure requirements for the area for all items in the bid submitted for a product category.

  • Has obtained a bid surety bond of between $50,000 and $100,000 for each bid area.


This bill also outlines how bid bonds should be treated after they are submitted:

  • For successful bidders that do not accept the contract, if their composite bid rate is at or below the median composite bid for that category - the bid bond would be forfeited and the Secretary of HHS would collect on it.

  • If a successful composite bid is above the median but the offer is declined, the bid bond would be returned within 90 days of the bidder’s notice of nonacceptance.

  • For losing bidders, the bid bond would also be returned within 90 days of their notice of nonacceptance.

Impact

Medicare beneficiaries who need medical devices, Medicare medical suppliers, businesses bidding to supply medical products through Medicare, and the Secretary of Health and Human Services.

Cost of House Bill H.R. 284

$0.00
The CBO estimates that this legislation would increase revenues by $1 million between 2015-2025, with bid bond forfeitures totalling less than $500,000 per year. Further, it projects that any additional costs to the government would have an insignificant effect on the federal budget.

More Information

In-Depth:

This bill also outlines how bid bonds should be treated after they are submitted:

  • For successful bidders that do not accept the contract, if their composite bid rate is at or below the median composite bid for that category — the bid bond would be forfeited and the Secretary of HHS would collect on it.

  • If a successful composite bid is above the median but the offer is declined, the bid bond would be returned within 90 days of the bidder’s notice of nonacceptance.

  • For losing bidders, the bid bond would also be returned within 90 days of their notice of nonacceptance.


Of Note:

An essentially identical version of this bill was introduced in the House during June 2014, but it failed to progress out of committee while the 113th Congress was in session.


Media:

Sponsoring Rep. Patrick Tiberi (R-OH) Press Release

CBO Estimate

PR Newswire

The Ripon Advance

HomeCare (Previous Version - Context)

MedTrade (Previous Version - Context)


Summary by Eric Revell 

(Photo Credit: "Scoliosis brace" by Scolidoc - Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons)

AKA

Medicare DMEPOS Competitive Bidding Improvement Act of 2015

Official Title

To amend title XVIII of the Social Security Act to require State licensure and bid surety bonds for entities submitting bids under the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition program, and for other purposes.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Finance
  • The house Passed March 16th, 2015
    Passed by Voice Vote
      house Committees
      Health
      Committee on Energy and Commerce
      Committee on Ways and Means
    IntroducedJanuary 12th, 2015

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    Ideally we need to get private vendors and contractors out of the medical industry entirely. Until that happens though, we can at least reduce the number of private companies making money off of taxpayers through predatory bidding practices.
    Like (5)
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    Requiring a bond to make a bid puts an unnecessary hurdle in an otherwise competitive environment.
    Like (3)
    Follow
    Share
    Let's make it a true bidding process and not a total shell game.
    Like (3)
    Follow
    Share
    My concern is that requiring a bond in order to submit an equipment bid would stifle innovators and smaller companies from offering or providing products in the name of "transparency" in the process.
    Like (2)
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    There are too many problems with the competitive bid program. Medicare has spent millions implementing it and even more in administration fees. Quality of equipment has gone way down and companies can no longer provide the service that is needed. Any willing provider at a set price should replace this program. Reading the comments, I see how little the public knows about the DME industry. If you think we make millions off taxpayers. You are wrong. We are less than 1% of a Medicare dollar. The bidding process is truly a joke. You have winners from other areas winning bids in your area that can not give you service if something goes wrong. You have national companies that are there but provide horrible service. If you think fewer providers is the answer, you better hope you never need anything. If you expect better quality and pay cheaper prices, you won't get it. Most DMEs right now are struggling to stay in business because margins are very small. Most companies are going to cash only. Soon, you won't find anyone that takes insurance and prices will not be cheaper. Better wake up before this industry is gone.
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    This would definitely stop the games played and rightly so.
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    I'm for outlying predatory low-ball bids, protecting taxpayers, and increasing the quality of products available through Medicare.
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    I don't like Medicare froad
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    Vendors should be required to fulfill their bids and government needs someone honest to oversee.
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    I can't believe this hasn't been part of the process already. Bids must be binding, bonds should be posted.
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    Not sure if this right or not. Make medical work and cheap. It is FOR the PEOPLE, not the bottom dollar.
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    Rules need to be in place to forego inconsistencies and cheating by the system.
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    In general yes but this is really rather vague
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    This seems really obvious. Companies should not be guessing, they should play it safely. Worst thing that happens is that the winning bid gets a bit more money
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    F
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    Without this attention to the process we taxpayers have often borne the corruption of sweetheart deals and cost overruns.
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    Reasons stated
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    Common sense. Please ensure we are making good decisions with our tax dollars.
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    If a company bids on a service/product, it must honor it.
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    I'm sure if you peel back the layers.....there is a certain amount of improper bidding for these contracts!
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