CMS press release as seen on HMENews:

WASHINGTON - Providers in the first 10 competitive bidding areas submitted bids that on average will lower the fee schedule rates on many DME items by 26%, CMS officials stated during a late afternoon press conference.

"This new program means that Medicare beneficiaries will have access to some medical equipment and supplies at substantially lower prices than they are paying now," said CMS Acting Administrator Kerry Weems. "The Medicare program and taxpayers will share in these savings. This program represents yet another way to use the competitive marketplace to bring the best possible and most efficient care and services to people with Medicare. Because new accreditation and quality standard initiatives are being implemented in conjunction with the phase in of competitive bidding, this program will provide assurance to beneficiaries that they are receiving high quality medical equipment for home use."

Here's my first reactions:

1. 26% reduction in reimbursement? DMEPOS has fought every reduction in reimbursement tooth and nail, usually unsuccessfully. Given the chance to rally together and set the rates that everybody can live with has resulted in a self-imposed reduction of 26%. Not to mention the 100% reduction in reimbursement for those who did not win the bid because they wanted to keep their reimbursement higher. Ouch.
2. "The Medicare program and taxpayers will share in these savings." Sounds all warm and fuzzy to the average American who doesn't need any DMEPOS and doesn't realize how little of the total Medicare budget is actually spent on DMEPOS (1.7%).
   
3. Does anybody else cringe when you read 'use the competitive marketplace' in reference to a program that actually reduces/eliminates competition? He who controls the language, controls the debate.
   
4. When was the last time any government program was able to deliver on a promise of 'best possible and most efficient' especially when it comes to care or service?
5. Of course with the 'new accreditation and quality standard initiatives' that are being implemented, service providers have no choice but to provide the best possible equipment and service to beneficiaries.

Round 1 bid awards are expected to be announced any day now. I'm sure this announcement was a precursor to set the tone of the upcoming announcements and quell as much public debate as possible. Are you (your company) ready for this?