Medicare begins Round 2 of DME bidding

Competitive bids for medical supplies are expected to save patients and the agency $28 billion.

By Charles Fiegl — Posted Dec. 9, 2011

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The agency overseeing the Medicare program is moving forward with the expansion of a competitive bidding system to purchase durable medical equipment.

The extension of the bidding process for medical equipment, prosthetics, orthotics and supplies across the country is expected to lower costs and save Medicare and patients more than $28 billion over 10 years. The Centers for Medicare & Medicaid Services began registering equipment suppliers for the bidding process on Dec. 5, but it does not expect the new prices chosen during this second round of bidding to take effect until July 1, 2013.

CMS introduced the first phase of competitive bidding in nine cities on Jan. 1, 2011. But some lawmakers and health care industry associations have worked to prevent the program from expanding to 91 metropolitan areas. Products open for bidding include oxygen supplies, wheelchairs and power scooters, enteral nutrients, continuous positive airway pressure devices, hospital beds, walkers, and negative pressure wound therapy pumps.

A 2003 Medicare statute created the competitive bidding process for medical equipment, but Congress has passed bills delaying its implementation. The Medicare agency has said competitive bidding would lower costs of equipment and supplies by an average of 26%. CMS maintains that the first phase of the bidding program has not harmed patient access.

Home health professionals report that they have seen no changes or improvements from the first round of the program, which was flawed and poorly designed, said Tyler Wilson, president of the American Assn. for Homecare, an Arlington, Va.-based firm that represents equipment suppliers. His organization favors alternative designs to set market prices for home medical equipment.

"One of the chief problems which CMS has yet to address is the practice of allowing nonbinding bids," Wilson said. "As designed, Medicare's bidding scheme is a race to the bottom in terms of the way we care for Medicare beneficiaries who depend on home-based care and equipment."

Reps. Glenn Thompson (R, Pa.) and Jason Altmire (D, Pa.) have continued to build support for legislation to abolish the DME competitive bidding process. The Fairness in Medicare Bidding Act has 164 co-sponsors and recently received a support letter from the National Federation of Independent Business, a Washington association that represents small-business interests. "The competitive bidding program threatens the viability of these businesses," said Susan Eckerly, senior vice president of public policy at NFIB.

Jonathan Blum, deputy CMS administrator and director of the CMS Center for Medicare, said the Medicare program has made several improvements to the competitive bidding process. The agency has increased its education and outreach efforts, and it has a toll-free help line to assist bidders.

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