CMS details stage two of competitive bidding program
Critics claim program causes more problems than it solves
Topics: Supply Chain, Finance, Medical and Surgical Supplies, Medicare, Reimbursement
December 02, 2011
CMS on Wednesday announced details for the second stage of its competitive bidding program for durable medical equipment (DME), despite opposition from patient groups, economists, and lawmakers, Healthcare Finance News reports.
In 2003, Congress required CMS to establish the Durable Medical Equipment, Prosthetics, Orthotics and Supplies competitive bidding program. The federal health reform law expanded the program, under which DME suppliers offer bids to provide certain equipment for Medicare in competitive bidding areas. CMS uses the bids to set reimbursement rates.
The first phase of the program was limited to nine metropolitan areas, and CMS officials said it reduced spending by $130 million in its first six months. In its second phase, the program will expand to 91 additional metropolitan areas. According to CMS, the second round likely will reduce spending by $28 billion over 10 years, and about one-third of the savings will go to beneficiaries.
The agency plans to expand the program during the second stage to add new bidding categories, including:
- Continuous positive airway pressure and respiratory assist devices;
- Enteral nutrients and equipment;
- Hospital beds;
- Negative pressure wound therapy pumps;
- Oxygen equipment and supplies;
- Support services, such as certain mattresses and overlays;
- Walkers; and
- Wheelchairs.
Registration for equipment suppliers to participate in the second round will begin on Dec. 5. The 60-day bidding period will start in late January 2012. The new prices are expected to take effect on July 1, 2013.
Stakeholder groups continue to oppose program
According to the American Association of Homecare (AAH), 30 patient advocacy groups, 244 economists and auction experts, and 145 members of Congress are concerned about the program's design, its effect on access to care, and its potential negative impact on local jobs.
AAH President Tyler Wilson said, "It is safe to say that the only organization that views the bidding system as a success is the federal agency in charge of its implementation." He notes that the program in round one "caused more problems than it solved," adding, "Round 2 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."
According to Deputy CMS Administrator Jonathan Blum, the agency has "considered feedback from many stakeholders to implement process improvements to make the competitive bidding program even stronger" (Letourneau, Healthcare Finance News, 12/1; Reichard, CQ HealthBeat, 12/1 [subscription required]).
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