The Centers for Medicare & Medicaid Services has identified 356 suppliers that have received 1,217 contracts from Medicare to provide medical equipment and supplies to beneficiaries in nine communities across the United States.
The new program, authorized by Congress, is expected to save Medicare and its beneficiaries nearly $28 billion over 10 years.
"We are pleased that Medicare beneficiaries living in the nine-first round communities will be saving money and will continue to receive high quality service and supplies," said CMS Administrator Donald Berwick, MD. "Each of these contract suppliers has met our stringent standards, so beneficiaries can be assured they will receive their equipment and supplies from legitimate and quality suppliers at prices that are more in line with the current market."
The competitive bidding program, established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, goes into effect on Jan. 1, 2011, for beneficiaries in the Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh and Riverside (Calif.) areas.
This program used bids from suppliers that represented the local, competitive marketplace to lower the costs for certain durable medical equipment (DME), prosthetics, orthotics and supplies for Medicare beneficiaries. Because beneficiaries pay 20 percent co-insurance on the payment amount for DME, they will directly benefit from the lower prices. Based on bids submitted by these suppliers, beneficiaries and Medicare will see prices, on average, 32 percent lower than Medicare pays for the same items.
CMS awarded the contracts to 356 suppliers in 662 locations. All contract suppliers are required to comply with Medicare enrollment rules, be licensed and accredited and meet financial standards. About 76 percent of contracts were awarded to suppliers already furnishing contract items in the local area.
Small suppliers – those with gross revenues of $3.5 million or less as defined for the DME competitive bidding program – make up about 51 percent of the contract suppliers. CMS received 6,215 bids from 1,011 suppliers during a 60-day bidding period last year.
Medicare beneficiaries living in the competitive bidding areas who need a DME supplier may need to choose a new supplier if their current supplier is not contracted and they wish to have Medicare continue to cover their equipment and supplies. A beneficiary may, in some situations, also be able to continue to receive certain items from a grandfathered supplier.
CMS plans to launch a comprehensive public education effort to ensure that beneficiaries, healthcare professionals and others have the information they need to understand the new program. This effort will include mailings, Internet-based and printed program information and teleconferences.
"Medicare contract suppliers signed contracts that included terms such as protections to ensure that they will furnish beneficiaries with necessary equipment and quality customer service, starting on Jan. 1, 2011," said Berwick. "Medicare will hold contract suppliers to their obligations and will take action to address any contract performance problems."