Despite growing concern from the durable medical equipment industry and Congress, the Centers for Medicare & Medicaid Services has taken the next step in its plan to implement a bidding process to provide medical equipment and supplies.
CMS on Monday announced the names of 325 suppliers that have signed contracts with Medicare to provide durable medical equipment, prosthetics, orthotics and supplies in 10 communities across the country.
The program goes into effect on July 1. CMS said it wants to move toward a competitive bidding process in an effort to lower the costs for DME and other supplies for the program and beneficiaries who face copayments for purchasing the supplies.
The program has drawn sharp criticism from the DME suppliers, who contend that the program is structured to exclude participation from small medical equipment suppliers, which aren't large enough to compete for bids in the program.
Suppliers' concerns drew Congressional attention two weeks ago in a hearing before the subcommittee on health for the House Ways and Means Committee. At that hearing, one member of the congressional panel suggested that the bidding program had significant gaps and needed to be retooled.
Congressional pressure is still being focused on the program. The subcommittee on urban and rural entrepreneurship of the House Committee on Small Business will conduct a hearing on Wednesday on the program.
In addition, the American Association for Homecare continues to urge members to contact senators to seek a delay in the program. Six senators last week drafted a letter to Health and Human Services Secretary Mike Leavitt outlining their concerns about the program. And the organization says a "Dear Colleague" member written by three members of the House of Representatives is being circulated for signatures among representatives.
However, Monday's announcement of the bid awards by CMS made no mention of any delays in the program, instead noting its estimates that beneficiaries and the Medicare program will see DMEPOS prices that are, on average, 26 percent lower than Medicare currently pays for the same items.
CMS reported receiving about 6,200 bids from 1,005 suppliers serving the 10 "competitive bidding areas." The 23 percent of suppliers who had bids accepted "were in the winning price range and met quality and financial standards," CMS said.
In giving its account of the bids, CMS said 61 percent were priced higher than the winning range, and slightly more than half of these bids were disqualified because they didn't meet other bid requirements. Another 16 percent of bids were disqualified even though they were in the winning range.
CMS also announced that it will extend the accreditation deadline for suppliers in the 70 metropolitan statistical areas that will comprise the second round of bidding areas, to take effect in 2009.
Reacting to announcements about round one bidding winners, Tyler J. Wilson, president of the American Association for Homecare, said that, "Nothing that CMS or Kerry Weems said about the bidding program have allayed the numerous concerns about the harmful impact that the program will have on patients and on the provider community. It's still a complete train wreck."