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H.R. 284, Medicare DMEPOS Competitive Bidding Improvement Act of 2015 1 (March 11, 2015)

handle is hein.congrec/cbo2145 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE COST ESTIMATE March 11, 2015 H.R. 284 Medicare DMEPOS Competitive Bidding Improvement Act of 2015 As ordered reported by the House Committee on Ways and Means on February 26, 2015 H.R. 284 would impose new requirements on private firms that supply products through Medicare's competitive bidding program for durable medical equipment (DME). CBO estimates that enacting H.R. 284 would increase revenues by about $1 million over the 2015-2025 period. The legislation could affect direct spending, but CBO estimates those effects would not be significant. Under current law, Medicare pays for some DME (including items like wheelchairs, hospital beds, and oxygen tanks and related supplies) using prices that are set through a two-stage process. In the first stage, firms submit bids to furnish a category of DME items to Medicare beneficiaries in a geographic area. The Medicare program uses those bids to exclude from the second stage the firms that submitted the highest bids. The remaining firms are invited to contract, for a period of three years, to supply that category of DME in that geographic area. The contractual price, or single payment amount (SPA), is the median bid of all the firms that are invited to participate in the second stage. Firms are free to decline to accept the contract. H.R. 284 would require that firms wishing to bid in a geographic area meet applicable licensure requirements of the state in which they are bidding and obtain a surety bond of between $50,000 and $100,000 from a bonding agency. If the company submitted a bid below the SPA in a geographic area but declined to accept a contract, it would forfeit the bond to the federal government. The estimate assumes those requirements would apply for contracts that go into effect beginning on January 1, 2019; in CBO's judgment, it would take several years to establish the requirements of the bond process through regulations and other program guidance. CBO is unsure whether under H.R. 284 the bonding agency or the Centers for Medicare and Medicaid Services (CMS), which administers the competitive bidding program, would hold the bond throughout the bidding process. CBO anticipates that these details would be clarified through regulations.

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