[Congressional Record Volume 161, Number 44 (Monday, March 16, 2015)]
[House]
[Pages H1646-H1647]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      MEDICARE DMEPOS COMPETITIVE BIDDING IMPROVEMENT ACT OF 2015

  Mr. RYAN of Wisconsin. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 284) 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, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 284

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare DMEPOS Competitive 
     Bidding Improvement Act of 2015''.

     SEC. 2. REQUIRING BID SURETY BONDS AND STATE LICENSURE FOR 
                   ENTITIES SUBMITTING BIDS UNDER THE MEDICARE 
                   DMEPOS COMPETITIVE ACQUISITION PROGRAM.

       (a) Bid Surety Bonds.--Section 1847(a)(1) of the Social 
     Security Act (42 U.S.C. 1395w-3(a)(1)) is amended by adding 
     at the end the following new subparagraphs:
       ``(G) Requiring bid bonds for bidding entities.--With 
     respect to rounds of competitions beginning under this 
     subsection for contracts beginning not earlier than January 
     1, 2017, and not later than January 1, 2019, an entity may 
     not submit a bid for a competitive acquisition area unless, 
     as of the deadline for bid submission, the entity has 
     obtained (and provided the Secretary with proof of having 
     obtained) a bid surety bond (in this paragraph referred to as 
     a `bid bond') in a form specified by the Secretary consistent 
     with subparagraph (H) and in an amount that is not less than 
     $50,000 and not more than $100,000 for each competitive 
     acquisition area in which the entity submits the bid.
       ``(H) Treatment of bid bonds submitted.--
       ``(i) For bidders that submit bids at or below the median 
     and are offered but do not accept the contract.--In the case 
     of a bidding entity that is offered a contract for any 
     product category for a competitive acquisition area, if--

       ``(I) the entity's composite bid for such product category 
     and area was at or below the median composite bid rate for 
     all bidding entities included in the calculation of the 
     single payment amounts for such product category and area; 
     and
       ``(II) the entity does not accept the contract offered for 
     such product category and area,

     the bid bond submitted by such entity for such area shall be 
     forfeited by the entity and the Secretary shall collect on 
     it.
       ``(ii) Treatment of other bidders.--In the case of a 
     bidding entity for any product category for a competitive 
     acquisition area, if the entity does not meet the bid 
     forfeiture conditions in subclauses (I) and (II) of clause 
     (i) for any product category for such area, the bid bond 
     submitted by such entity for such area shall be returned 
     within 90 days of the public announcement of the contract 
     suppliers for such area.''.
       (b) State Licensure.--
       (1) In general.--Section 1847(b)(2)(A) of the Social 
     Security Act (42 U.S.C. 1395w-3(b)(2)(A)) is amended by 
     adding at the end the following new clause:
       ``(v) The entity meets applicable State licensure 
     requirements.''.
       (2) Construction.--Nothing in the amendment made by 
     paragraph (1) shall be construed as affecting the authority 
     of the Secretary of Health and Human Services to require 
     State licensure of an entity under the Medicare competitive 
     acquisition program under section 1847 of the Social Security 
     Act (42 U.S.C. 1395w-3) before the date of the enactment of 
     this Act.
       (c) GAO Report on Bid Bond Impact on Small Suppliers.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study that evaluates the effect of the bid 
     surety bond requirement under the amendment made by 
     subsection (a) on the participation of small suppliers in the 
     Medicare DMEPOS competitive acquisition program under section 
     1847 of the Social Security Act (42 U.S.C. 1395w-3).
       (2) Report.--Not later than 6 months after the date 
     contracts are first awarded subject to such bid surety bond 
     requirement, the Comptroller General shall submit to Congress 
     a report on the study conducted under paragraph (1). Such 
     report shall include recommendations for changes in such 
     requirement in order to ensure robust participation by 
     legitimate small suppliers in the Medicare DMEPOS competition 
     acquisition program.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Wisconsin (Mr. Ryan) and the gentlewoman from California (Ms. Linda T. 
Sanchez) each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin.


                             General Leave

  Mr. RYAN of Wisconsin. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on H.R. 284, currently 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may 
consume.
  I simply want to, again, commend our committee, Republicans and 
Democrats, for working on a bipartisan basis to fix a problem in the 
Medicare Program that needs fixing.
  I want to specifically highlight Mr. Tiberi, a senior member of our 
committee from Ohio, along with Mr. Larson, a senior member of the 
committee from the Democratic side of the aisle, for working together 
to fix a very deep flaw in a competitive bidding system which needs a 
lot of work to be improved.
  At this time, I yield such time as he may consume to the gentleman 
from Ohio (Mr. Tiberi) for the purpose of describing and explaining the 
need for this legislation.
  Mr. TIBERI. Thank you, Mr. Chairman, for your support of H.R. 284, 
the Medicare Competitive Bidding Improvement Act which, as you said, I 
introduced with my friend and colleague from Connecticut, Mr. John 
Larson.
  The bill does fix a fundamental flaw in the Medicare durable medical 
equipment Competitive Bidding Program by simply requiring that bids be 
binding. It will promote fairer competition. More importantly, it 
protects our seniors and supports small businesses.

[[Page H1647]]

  DME includes items like home oxygen, blood sugar monitors, and 
walkers for seniors. The Competitive Bidding Program was intended to 
reduce out-of-pocket costs for these seniors.
  However, over the last several years, it has become very clear, Mr. 
Speaker, that the bidding process is extremely flawed, in large part 
because the bids are not binding. This encourages low-ball bidding--or 
suicide bidding--which artificially drives down prices and will 
eventually lead to market failure because there is no performance on 
many of these bids, meaning seniors don't get their equipment.
  I have heard from seniors, beneficiaries, and small business 
suppliers in my State of Ohio that the program is impeding access to 
needed items for seniors, like the ones I just described, ultimately 
harming their health and making costs more expensive for our seniors 
and the program itself. This is absolutely unacceptable.
  The goal of the bill is to reduce the number of bad actors who are 
now participating in the program by simply imposing a penalty if the 
supplier who wins the bid doesn't accept the contract to the bid they 
won.
  The bill will help ensure that these suppliers submit bids in good 
faith, creating more certainty for those suppliers, and, most 
importantly, making sure that seniors get the supplies and the 
equipment that they need and qualify for, increasing access to more 
quality products and services at the end of the process.
  If this bill is signed into law, seniors across the country will no 
longer have to worry about whether the company in their area will 
provide the information and, more importantly, the equipment to which 
they bid on and actually be able to provide that wheelchair, walker, or 
oxygen tank that that senior so desperately needs.
  As the chairman of the Ways and Means Committee mentioned, the bill 
has bipartisan support. It is a commonsense bill that actually passed 
the Ways and Means Committee unanimously. It was scored by the 
Congressional Budget Office to actually save taxpayer dollars over the 
next 10 years.
  I encourage my colleagues to support the bill, and I thank Mr. Larson 
for his partnership.
  Ms. LINDA T. SANCHEZ of California. Mr. Speaker, I yield myself such 
time as I may consume.
  I know that this legislation has been in the works by Representatives 
Tiberi and my good friend Mr. Larson from the State of Connecticut. 
Unfortunately, he could not be here to speak on his own bill due to 
unforeseen circumstances, so I am but a poor fill-in for Mr. Larson.
  The bill is a commonsense bill that will save a lot of money. The 
durable medical equipment Competitive Bidding Program has reduced well-
documented overpayments to DME providers.
  It is estimated that it would result in $42 billion in savings over a 
10-year period, with $26 billion in savings for the Federal Government 
and more than $17 billion in out-of-pocket savings for beneficiaries 
themselves.
  This legislation, as I mentioned, was introduced in the Ways and 
Means Committee by Representatives Tiberi and Larson. What they are 
essentially trying to get at is the issue of low-ball bidders, and what 
this legislation would do is require bonds for companies who wish to 
participate in the program.
  The Ways and Means Committee did pass this bill out of the committee 
on a unanimous voice vote, and I, as well, support its passage. I urge 
my colleagues to support H.R. 284 as a commonsense solution that will 
save money in the long run.
  I yield back the balance of my time.
  Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself the balance of my 
time to say the gentlewoman understates the point. She is a perfectly 
fine fill-in for Mr. Larson.
  I congratulate my colleagues on the committee for seeing a problem 
and rushing to fix this problem. This is what we are supposed to do 
here.
  We are legislating a solution to make sure that senior citizens have 
access to the highest quality, lowest price durable medical equipment. 
There is a flaw in the law in how that is being done, and this bill 
rectifies that.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Wisconsin (Mr. Ryan) that the House suspend the rules 
and pass the bill, H.R. 284, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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