Medicare bid plan saves $202 million
Report: Beneficiaries also saw savings on medical equipment
WASHINGTON — A new competitive bidding pilot program that replaces Medicare fee schedules for durable medical equipment — such as wheelchairs, oxygen tanks or diabetic test strips — has saved Medicare $202 million in its first year, according to a report released Wednesday by the government. Beneficiaries also saw 42% in savings in their co-insurance payments for medical equipment vs. what they would have paid through the old system.
The Centers for Medicare and Medicaid Services predict the program, if expanded nationwide, could save seniors and people with disabilities $17.1 billion in the next 10 years. The Medicare trust fund would also see savings of $25.7 billion. The pilot program includes nine metropolitan areas.
The pilot program originally began in 2007 in an effort to cut costs and combat fraud, but Congress then passed a law terminating the original study and delaying further pilots because there were fears about how it was being implemented.
The program started again in January 2011 as part of the 2010 health care law, which says competitive bidding rates would be mandatory nationally by 2016.
The Congressional Research Service in August 2010 also found that competitive bidding could lead to savings for Medicare and Medicare beneficiaries, and that it did not reduce access to equipment for beneficiaries.
However, durable medical equipment providers have lobbied against the process, saying it would reduce access, that implementation has been a problem in the past and that fewer suppliers would be involved in the process.
“We believe it will translate to greater costs in other areas, such as emergency-room visits and nursing home stays,” said Michael Reinemer, spokesman for the American Association for Homecare, after hearing the results of the new report. “People won’t be able to get access.”
He said the bidding process excludes many providers from working with Medicare, and pushes prices unreasonably low. Providers are already working at a “lean” profit margin, he said.
According to the Medicare Payment Advisory Commission, Medicare spent $8.1 billion on durable medical equipment in 2010. They found that similar programs piloted in 2000 and 2002 did not cause significant quality issues.