De­spite up to $26B in pro­jected sav­ings, bid­ding pro­gram still ques­tioned

Modern Healthcare - - NEWS - By Alex Kacik

Medi­care’s com­pet­i­tive bid­ding pro­gram for durable med­i­cal equip­ment showed prom­ise in sav­ing money, but crit­ics still worry about its long-term sus­tain­abil­ity and im­pact on the over­all in­dus­try.

Prices se­cured through the early stages of the bid­ding pro­gram were, on av­er­age, 35% lower than the prices in the CMS’ 2010 fee sched­ule that were based on his­toric sup­plier charges, a new study pub­lished in Health Af­fairs found. The CMS an­tic­i­pates that will trans­late to $25.7 bil­lion in fed­eral sav­ings from 2013 through 2022, while Medi­care ben­e­fi­cia­ries will col­lec­tively save an ad­di­tional $17.1 bil­lion.

The CMS’ ne­go­ti­ated prices were an av­er­age of 8.1% lower than com­mer­cial in­sur­ers gen­er­ated.

Sup­port­ers say the Durable Med­i­cal Equip­ment, Pros­thet­ics, Orthotics and Sup­plies Com­pet­i­tive Bid­ding Pro­gram, which be­gan in 2011, could con­tinue to save the gov­ern­ment bil­lions. Ad­vo­cacy groups, in­clud­ing AARP, as well as the Gov­ern­ment Ac­count­abil­ity Of­fice, said they haven’t seen the bid­ding pro­gram harm ac­cess, which has been a point of con­tention.

In March, the CMS halted plans to ex­pand the pro­gram in 2019 af­ter crit­ics con­tended that it en­cour­ages bid­ders to of­fer only the low­est-cost prod­ucts rather than what’s most needed. They also ar­gued that the process lacks trans­parency and does not ad­e­quately as­sess the fi­nan­cial strength of com­pa­nies that re­ceive con­tracts.

“The Amer­i­can As­so­ci­a­tion for Home­care will work to make sure that the in­dus­try’s con­cerns about the bid­ding pro­gram—an ini­tia­tive that is putting long-time (home med­i­cal equip­ment) com­pa­nies out of busi­ness, re­duc­ing ben­e­fi­ciary ac­cess, and re­sult­ing in re­im­burse­ment rates be­low provider costs—are ef­fec­tively pre­sented to the CMS,” the group said in a state­ment.

HHS Sec­re­tary Dr. Tom Price has voiced his long-held con­cerns with the CMS’ com­pet­i­tive bid­ding process. As a con­gress­man, Price in­tro­duced a bill in 2015 that aimed to amend the bid­ding process, ad­dress con­cerns about ru­ral ac­cess and es­tab­lish an auc­tion process based on “mar­ket prices” rather than the me­dian price.

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