CMS To Move Forward With Durable Medical Equipment Competitive Bidding Despite Lawmakers’ ObjectionsCMS on Friday announced that it will renew a competitive bidding program for durable medical equipment, CQ HealthBeat reports (Reichard, CQ HealthBeat, 4/17). CMS currently pays set fees for DME used at patients' homes. However, CMS has said the prices it pays are too high. According to the Wall Street Journal, CMS sometimes pays several thousand dollars more than some online vendors charge.
The competitive bidding program was mandated by a 2003 law. Last year, CMS solicited bids and notified patients in 10 metropolitan areas that they could use DME supplied by approved providers (Zhang, Wall Street Journal, 4/17). However, legislation approved in 2008 delayed the program and required that CMS redo the first round of bidding and provide feedback to suppliers about missing bid information rather than automatically disqualifying them. CMS in February then postponed the implementation of the competitive bidding rule until April (Kaiser Daily Health Policy Report, 2/23).
The legislation that delayed the program, called the Medicare Improvements for Patients and Providers Act of 2008, included a requirement that CMS begin a second run of the first round of the program in 2009, according to CMS. The legislation also put the competitive bidding process on track for expansion in dozens of other cities, according to CQ HealthBeat (CQ HealthBeat, 4/17).
Government officials said that the competitive bidding program, which will now begin on Jan. 1, 2011, could reduce expenditures by $1 billion annually. In addition, officials said the program could reduce fraud. According to the Journal, President Obama has stated his intent to eliminate wasteful spending within the health care system and administration officials have said that a competitive bidding program has been shown to reduce cost and increase quality (Wall Street Journal, 4/17). CMS said it will issue instructions on requirements for making bids in upcoming weeks (CQ HealthBeat, 4/17).
Earlier this month, 84 lawmakers sent a letter to the agency urging it to issue a proposed rule allowing further public comment on the bidding program instead of proceeding to a final rule. The letter noted that only 376 of the more than 4,000 providers in the initial bidding area qualified under the program's initial requirements, "which were not clearly defined by CMS and its contractors" (CQ HealthBeat, 4/17).
In addition, 28 home-care groups wrote in a letter to CMS asking it to eliminate the bidding program. The groups in a news release said that such a program "will lower quality and reduce access to care for seniors and people with disabilities." They also said it would force out as many as 90% of DME suppliers, many of which are small businesses, the Journal reports.
Tyler Wilson, president of the American Association for Homecare, said that as companies submit low bids to gain contracts, some businesses will be forced to close, limiting customers' choices. "Medicare beneficiaries will be the ultimate losers here," he said (Wall Street Journal, 4/17).