Despite opposition, Round Two plans move forward
WASHINGTON – Ignoring months of protests, the Centers for Medicare & Medicaid Services (CMS) announced in late August the next steps for a major expansion of a competitive bidding program designed to help lower costs for quality durable medical equipment, prosthetics, orthotics and supplies.
Advocacy groups, economists and members of Congress have objected to the program, claiming it results in reduced access to care and higher costs.
The competitive bidding program uses competitions between suppliers to set new, lower payment rates for certain medical equipment and supplies such as oxygen equipment, walkers and some types of power wheelchairs.
“We’re taking steps that will save Medicare, seniors and taxpayers $28 billion over 10 years,” said CMS Administrator Donald M. Berwick, MD, in a statement. “Medicare is paying much more than the private sector for equipment like wheelchairs and walkers. By expanding our successful competitive bidding program, we can ensure that Medicare pays a fair rate for these goods.”
The first phase of the program was implemented for nine product categories in nine areas of the country on January 1, 2011.
CMS says that to date, Round One of competitive bidding has yielded savings of 35 percent compared to the fee schedule. Inquiries in the first quarter of 2011 totaled less than 0.9 percent of calls to the Medicare call center, and Medicare received 45 complaints during that time.
As required by law, CMS will conduct the second phase of the program for a similar set of products in 91 major metropolitan areas. Competition begins this fall, and the new prices will be in effect on July 1, 2013.
From a beneficiary standpoint, there will be no immediate effect in areas where the program is expanding. Beneficiaries may continue to use their current suppliers at this time.
“The success we’ve had in the first phase tells us that we can achieve these savings with no disruption for patients’ access and no negative effect on patients’ health,” said Jonathan Blum, deputy CMS administrator and director of the Center for Medicare in a statement. “We remain confident in our bidding methodologies that will produce tangible savings while ensuring adequate choice of qualified suppliers.”
Not everyone agrees that the CMS bidding program is a success. For months, several economists, consumer groups and members of Congress have gone on record to oppose the program, citing reduced patient access to care, flaws in the program design and impact on local jobs.
“In Round One, the Medicare bidding program created more problems than it solved. Round Two will just compound the disruption and dissatisfaction that is occurring right now with respect to beneficiaries and DME providers as well as physicians, case managers, discharge planners and others who help connect those who need good homecare with those who provide it,” said Tyler J. Wilson, president of the American Association for Homecare. “The list of organizations that oppose this program is long and keeps growing. Nearly 150 members of Congress, across the political spectrum, are in support of legislation that would roll back the program. At this point, it is safe to say the only organization that views the bidding system as successful is the federal agency in charge of its implementation,” said Wilson.
For more on the supply chain, see bit.ly/hfn-supply.