Study Says Medicare Bidding Won't Lower Costs

A study by two Robert Morris University Professors and funded by the Pennsyvania Association of Medical Suppliers says thousands of small medical suppliers will be forced out of business by competitive bidding, ultimately raising costs to taxpayers and consumers.
The bidding plan is part of a 2003 federal overhaul, and officials from the Center for Medicare and Medicaid Services says it will save $1 billion by the year 2010. Pittsburgh is one of 10 metropolitan areas chosen to adopt the plan in 2008, with 70 more signing on in 2009. Study co-author Stephen Foreman says small companies won't be able to compete with large suppliers, and since CMS controls most of the market, they won't be around for the next bidding cycle, and there will be less competition to keep prices down. Foreman says he doesn't know of any provisions for small suppliers, but according to the CMS website, suppliers with an annual gross revenue under $3.5 million are accorded some protection. In each product category, there is a 30% participation target for small suppliers, if they're willing to accept the lowest bid price. They can also network and submit a collective bid for consideration.
Suppliers will know within the next 4 weeks which bids are accepted for the Pittsburgh region.