Dive Brief:

• The Centers for Medicare and Medicaid Services has finalized changes to how Medicare will pay for diabetes devices. According to a final rule, scheduled to publish Tuesday, Medicare will pay for certain continuous glucose monitors, insulin pumps and diabetes supplies on a bundled monthly rental basis.
• The CMS uses competitive bidding for certain types of medical devices to save money, establish sustainable prices, and limit fraud and abuse. Suppliers submit bids to provide medical equipment and supplies, and Medicare awards contracts.
• Medtech lobbying group AdvaMed said in a Sunday statement that it was encouraged by some changes the CMS made in response to draft comments, including extending the implementation timeline and expanding the number of contracts awarded. However, AdvaMed said the program “still has significant shortcomings and we remain concerned about its potential impact on patient access.”

Dive Insight:

The final rule would go into effect starting Jan. 1. The CMS is expected to announce specific dates for registration and bidding in late spring or early summer. The agency plans to open the bid window in late summer or early fall next year, and award contracts in 2027.

The CMS said the final rule will eliminate the need to wait five years to replace equipment, allowing people to use the latest devices.

“We believe that the technology for CGMs and insulin infusion pumps, which are often used in conjunction with CGMs, will continue to change very rapidly in future years,” the CMS wrote in its final rule, noting that 17 new CGMs have been introduced to market in the last decade. 

In comments submitted this summer, AdvaMed raised concerns about classifying CGMs and insulin pumps as “frequently and substantially serviced” products, stating that there is no clear framework outlining how device returns will be coordinated or how long transitions will take. The lobbying group also asked whether suppliers will be required to offer a variety of different device combinations, raising concerns that the policy could “inadvertently restrict patient choice and access to the most appropriate technologies for their care.”

The CMS addressed those concerns in the final rule by specifying that contract suppliers must furnish the specific brand of CGM or insulin pump prescribed for a patient. 

The final rule follows comments last month from the House and Senate Diabetes Caucuses calling for the CMS to address “serious flaws” with the proposed rule before restarting its competitive bidding problem. More recently, a watchdog report from the Department of Health and Human Services’ Office of Inspector General called for the CMS to use its competitive bidding program to adjust payments for CGMs and supplies, after the report found Medicare was paying above supplier costs and retail prices for the diabetes equipment.

The CMS also included ostomy, tracheostomy and urological supplies in its competitive bidding program, despite AdvaMed’s opposition. AdvaMed said these products don’t fall under the definition of durable medical equipment, are highly individualized and disruptions in access could lead to serious complications.