Round Two will affect 91 markets across the country and will also reimburse a single payment amount for diabetic testing supplies, whether those supplies are purchased through a retail supplier or mail-order supplier. On Tuesday, the CMS announced that 18 suppliers have accepted contracts to provide mail-order diabetic-testing supplies.
Federal officials say the program is delivering substantial savings. Earlier this year, the CMS estimated that for Round Two, the Medicare program will pay, on average, about 45% less than its current fee schedule amounts for eight product categories that include hospital beds, oxygen equipment, wheelchairs and scooters. Payment amounts for the national mail-order program for diabetic testing supplies, meanwhile, are an average of 72% less than fee-schedule rates.
According to the CMS, the competitive bidding program yielded about $202 million in savings in the first year and is expected to save the Medicare Part B Trust Fund about $25.7 billion between 2013 and 2022. Beneficiaries are expected to save about $17.1 billion through lower coinsurance and copayments.
“Our extensive monitoring in Round One showed that competitive bidding reduced spending without jeopardizing access to medical equipment and supplies,” Jonathan Blum, deputy CMS administrator and director of CMS' Center for Medicare, said in a news release about the contract awards.
But industry groups and economists have said the program is flawed.
Just last week, the American Association of Homecare called Medicare's bidding program for home medical equipment “defective and dangerous,” saying that it is forcing both small and larger providers in California to either lay off employees or close their businesses. As one example, the association noted that Western Rehab, a provider of equipment to clients in 15 counties in northern California, has stopped providing power wheelchairs and other mobility equipment to Medicare patients.
“We will no longer be able to accept any Medicare-funded beneficiaries due to the reduced reimbursement,” Mark Hawkins, owner of Western Rehab, said in the release. “The reduced rates do not allow for delivery time and expense to our rural customers,” he continued. “It will have an extremely detrimental effect on beneficiary access to homecare products, as there are limited (or no) companies that service those rural counties.”