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NATIONAL COMPETITIVE BIDDING (NCB) Legislation Status and Comparison

NATIONAL COMPETITIVE BIDDING (NCB) Legislation Status and Comparison. Aftermath of CMS takeover. In the demonstration sites, fewer than 25% of providers won Medicare contracts Of non-participants, only 20% can survive long-term without Medicare patients National chains will dominate

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NATIONAL COMPETITIVE BIDDING (NCB) Legislation Status and Comparison

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  1. NATIONAL COMPETITIVE BIDDING (NCB)Legislation Status and Comparison

  2. Aftermath of CMS takeover • In the demonstration sites, fewer than 25% of providers won Medicare contracts • Of non-participants, only 20% can survive long-term without Medicare patients • National chains will dominate • Negative impact on beneficiaries, including rural areas Industry – post NCB

  3. Aftermath of CMS Takeover • 60% of the nation’s independent dealers out of business • Severe change in seniors’ access to their preferred provider • Providers forced to reduce the quality of product service to become lower cost providers • Halting of innovation in home care products

  4. CBO Estimates for NCB • CBO estimated gross 10 year savings of competitive bidding at $7.7 billion • $5.8 million of this “savings” reverts to the US Treasury

  5. Cost of Bureaucracy? CMS administrative costs for the demonstration were 56% of the gross savings Demonstration sites

  6. Questions on the rate of growth The future growth rate of homecare spending is subject to estimates. CBO’s growth estimate results in 33% greater homecare expenditures as compared to CMS’s estimated growth rate Growth in Homecare ($B)

  7. Behind the numbers • Administrative costs at demonstration sites were 56% of gross savings • CBO analysis assumed higher growth rate than CMS. Splitting the difference reduces gross savings by $1 billion • This does not even include the reduction in income tax collections • Little “savings” left for federal government

  8. Conclusions • The costs and likely “savings” from competitive bidding are still unknown • No objective analysis performed to date • Significant uncertainties in the assumptions • Huge negative impact on access, service, quality and innovation • Canada tried it and it failed • Fails the smell test – eliminates many businesses, increases the size and control of federal government

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