Healthcare Business News

Beneficiary access unaffected by DME competitive bidding program, GAO says

By Virgil Dickson
Posted: April 9, 2014 - 1:30 pm ET

Medicare's competitive bidding program for durable medical equipment has not impacted beneficiary access, according to a Government Accountability Office report.

The program has saved the CMS $400 million in its first two years of operation. The number of beneficiaries receiving medical equipment dropped in the areas of the country where the program is active, the report noted. For instance, the number of Medicare members who got oxygen supplies decreased by about 22% from 2010 in the areas with competitive bidding.

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However, this cut may be due to a “reduction of inappropriate usage of (durable medical equipment), and these decreases do not necessarily reflect beneficiary access issues,” according to the report.

The findings run counter to arguments from DME suppliers

that the program is encouraging bidders to offer only the lowest-cost products rather than those best suited to beneficiaries' needs. The Medical Device Manufacturers Association, a national trade group, raised that concern in response to a recent request for comment by the CMS on the future of the program.

The trade group also contended that the program has meant beneficiaries are losing access to equipment and supplies they need, as well as experiencing difficulty finding new suppliers and poor service from winning bidders.

The GAO report examines how the program played out in 2012, its second year in operation. To determine the program's impact on beneficiaries, GAO compared Medicare claims data for 2011 and 2012 with that for 2010, the year before the program began. Responses to the program from medical equipment representatives were also gathered and reviewed.

The report will serve as a powerful defense against not only equipment manufacturers, but some lawmakers, who have also criticized the program, said Loren Adler, research director for the Committee for A Responsible Federal Budget.

“It gives them ammo to push back against the critics and lobbyist who are seeking to slow down the process of the program,” Adler said. The report “makes it more likely that CMS will move full steam ahead to expand competitive bidding throughout the nation.”

The GAO said it will continue to monitor the program as it continues to expand. The CMS estimates the program will save another $17.2 billion for beneficiaries and $25.8 billion for the Medicare program over the next 10 years. The Patient Protection and Affordable Care Act mandated an adjustment to the fees being paid for durable medical equipment beginning Jan. 1, 2016.

Follow Virgil Dickson on Twitter: @MHvdickson

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