DME Competitive Bidding: 32% Cost-Cutting Expected From Revived Program

Article preview from "The Gray Sheet" - July 5, 2010

CMS plans to cut reimbursement an average 32% next year for certain durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) sold in nine markets, the agency announced July 1.

DME Competitive Bidding: 32% Cost-Cutting Expected From Revived Program

Article preview from "The Gray Sheet" - July 5, 2010

CMS plans to cut reimbursement an average 32% next year for certain durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) sold in nine markets, the agency announced July 1.

Payment will change Jan. 1, 2011, for nine product categories based on the first round of supplier bidding under the DMEPOS competitive bidding program. The bidding, completed late last year, is actually a second attempt following an initial round-one competitive bidding effort two years ago.

The original 2008 bidding round was expected to shave an average 26% off Medicare payments in 10 product categories within 10 regions. But the cuts were retracted within a matter of weeks when the Medicare Improvements for Patients and Providers Act (MIPPA) directed the agency to delay the program's launch and implement changes within the standard DMEPOS fee schedule in the interim.

MIPPA also excluded Puerto Rico from the round- one rebid, and it removed negative pressure wound therapy and certain complex rehabilitative power wheelchairs from the process.

Jonathan Blum, CMS Deputy Administrator and Director for the Center for Medicare, said during a July 1 press call that the program is expected to save taxpayers and beneficiaries more than $17 billion over 10 years. It will be expanded to additional markets after round-two bidding begins next year.

With the new payment rates set in the first nine markets, CMS will immediately offer contracts to 364 winning bidders. If any of the suppliers reject them, the contracts will then be offered to other suppliers to ensure Medicare beneficiaries retain sufficient access to products where they live.

Under the competitive bidding program, a limited number of suppliers within a given market win three-year contracts. Other bidders may compete when the contract comes up for bid again.

The agency expects to award all first-round rebid contracts by September.

The program is moving forward despite longstanding misgivings by home health care industry groups.

According to Blum, CMS has made tremendous improvements to the competitive bidding program in the past year and a half, and he has "great confidence the program will go forward" this time.

- Monica Hogan


Purchase this article online as a PDF and receive it immediately via email. Questions? Call (800) 332-2181. 100% Satisfaction Guaranteed.

Sign up for a complimentary 30-day trial of "The Gray Sheet"  There is no obligation and no credit card needed.  Click here to sign up and get your first issue.

Plus:
To find out about more about more about Elsevier Business Intelligence's medical device publications and databases, multi-user access and/or advertising with Medical Devices Today, please contact Kristy Kennedy at (480) 985-9512