Dive Brief:
- The Government Accountability Office, which is tracking the impact of CMS’ competitive bidding program (CBP) on durable medical equipment for Medicare beneficiaries, found the number of suppliers providing items at adjusted rates in certain areas fell 11% in 2017 compared to the year before.
- The decrease follows an 8% decline in the number of suppliers in 2016, the first year that payment rates were reduced in those "non-bid" geographic locations. The areas are called non-bid because they weren't targeted for rate adjustments in the initial round of competitive bidding in 2011.
- The GAO recommended no changes to the program in its report.
Dive Insight:
The competitive bidding program aims to save Medicare money on durable medical equipment by replacing a standard fee schedule based on 1980s pricing with competition among suppliers that operate in a particular area.
Under the old system, Medicare had been paying above-market rates for some equipment, according to both the GAO and CMS' Office of Inspector General. Durable medical equipment includes items such as wheelchairs, hospital beds, oxygen equipment, walkers, blood sugar monitors, infusion pumps and more.
The new Dec. 21 GAO report is an update to the agency’s July study that looked at the impact of adjusted rates for DME in non-bid areas in 2016. According to the new report, the 11% reduction in suppliers in 2017 continues a trend of annual decreases in non-bid areas that has averaged 8% since 2011.
The report also found that the number of Medicare beneficiaries who received at least one rate-adjusted item in non-bid areas in 2017 fell 2% from the prior year. That compares with a decrease of less than half of 1% in 2016.
In its July report, the GAO noted concerns among some beneficiary advocacy groups and industry trade organizations that cuts to DME payments under competitive bidding would reduce patient access to equipment. However, the GAO determined based on a review of Medicare claims data that there were no widespread problems with beneficiaries getting needed equipment.
CMS currently estimates the CBP process will save the Medicare program about $3.6 billion and beneficiaries about $1.2 billion between fiscal 2016 and 2020. GAO said it will continue to monitor the process in case problems emerge.
