The Centers for Medicare and Medicaid Services (CMS) has prepared the next steps for a major expansion of competitive bidding, a program that uses competitions between suppliers to set new, lower payment rates for certain medical equipment and supplies, including CPAP devices.
“Today, we’re taking steps that will save Medicare, seniors, and taxpayers $28 billion over 10 years,” said CMS Administrator Donald M.
Berwick, MD. “Medicare is paying much more than the private sector for equipment like wheelchairs and walkers. By expanding our successful competitive bidding program, we can ensure that Medicare pays a fair rate for these goods.”
The first phase of the program was implemented for nine product categories in nine areas of the country on January 1, 2011. To date, Round One of competitive bidding has yielded savings of 35% compared to the fee schedule, 51% of contracts awarded to small businesses, and no changes in beneficiary health status. Inquiries in the first quarter of 2011 totaled less than 0.9% of calls to the Medicare call center, and Medicare received only 45 complaints during that time.
As required by law, CMS will conduct the second phase of the program for a similar set of products in 91 major metropolitan areas. Competition begins this fall, and the new prices will be in effect on July 1, 2013.
From a beneficiary standpoint, there will be no immediate effect in areas where the program is expanding. These beneficiaries may continue to use their current suppliers at this time. Similar to the implementation of Round 1 of the program, CMS will conduct outreach to beneficiaries in the Round 2 areas prior to the new program taking effect.
“The success we’ve had in the first phase tells us that we can achieve these savings with no disruption for patients’ access and no negative effect on patients’ health,” said Jonathan Blum, deputy CMS Administrator and director of the Center for Medicare. “We remain confident in our bidding methodologies that will produce tangible savings while ensuring adequate choice of qualified suppliers.”
CMS will now begin a prebidding supplier awareness program for Round Two, and conduct a national mail order competition for diabetic testing supplies at the same time as the Round Two competition. A list of ZIP codes included in Round Two and a list of the specific items in each product category are available on the Web site for the Competitive Bidding Implementation Contractor.