MEDICARE COMPETITIVE BIDDING PILOT BEGINS IN TEN AREAS

Medicare began purchasing oxygen supplies, power wheelchairs and other Durable Medical Equipment (DME) through a competitive bidding program on July 1 as part of a pilot program in ten geographic regions throughout the country, including areas of Ohio, Florida, California and Pennsylvania.

To receive a contract under the competitive bidding program, suppliers had to bid to provide supplies in one or more of ten classes of DME, obtain accreditation based on quality standards, and provide financial documents to back up their bids.

The ten DME classes subject to bidding are oxygen supplies and equipment; standard power wheelchairs and scooters; complex rehabilitative power wheelchairs; mail-order diabetic supplies; continuous positive airway pressure (CPAP) devices and respiratory assist (RAD) devices; feeding tube food and supplies; hospital beds; negative pressure wound therapy devices; and walkers.

This new program is estimated to reduce Medicare payments by providing an incentive for suppliers to accept lower payments for items and services in order to retain their ability to serve people with Medicare.

According to a May GAO report, the first round of competitive bidding could result in an average 26 percent savings to both Medicare and consumers. Additionally, this program is expected to reduce the number of improper payments to DME suppliers because it will provide CMS with the authority to scrutinize the financial documents and application materials of participating bidders. Because of concerns that the bidding process may cause suppliers to cut their costs by providing lower-quality DME, adequate oversight is critical for the program’s success, according to the GAO.

-Adapted from: “Competitive Bidding Program Begins in Ten Areas” , MEDICARE WATCH , a biweekly electronic newsletter of the Medicare Rights Center, Vol. 11, No. 14: July 8, 2008.

 

07/08