The use of Durable Medical Equipment, Prosthetics, Orthotics and Supplies by Medicare patients dropped 17% from 2012 to 2014 after the introduction of Round 2 competitive bidding, but only 6% in nonbid areas, according to the Government Accountability Office. The GAO determined that 11% of bid areas had three or fewer active contractors, and in 6% of cases, one supplier had at least a 90% share of the market.
CMS has opened a public comment period for a new rule that could change the formula for reimbursements for durable medical equipment, prosthetics, orthotics and supplies, whether or not companies participate in competitive bidding. CMS is asking a series of questions in two areas: how pricing information from DMEPOS competitive bids should be implemented outside the bidding areas, and how to establish a competitive bidding policy that allows the use of bundled payments for certain types of DME. The comment period ends March 28.
CMS says its Competitive Bidding Program for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies is saving substantial amounts each year. But many economists, patients and industry groups contend that the program, which employs nonbinding bids and allows CMS to set median prices, is unfair and flawed. "This is not competitive bidding and there is no guarantee that the winning bidders can actually supply the products and services at the prices selected by CMS," said Joel Marx of the American Association for Homecare.
Two members of the U.S. House of Representative have asked the Health and Human Services inspector general to investigate irregularities in the competitive bidding process by the CMS for durable medical equipment, which includes prosthetics and orthotics. The representatives allege violations of state licensing and accreditation rules, as well as a lack of transparency in the process, improper supplier vetting and a lack of binding bids.
CMS is requesting comments through April 30 on the proposed Change of Ownership Purchaser and Contract Supplier Notification forms that are part of the competitive bidding program for durable medical equipment, prosthetics, orthotics and supplies. Information in the forms will help CMS determine if a merger or acquisition meets competitive bidding requirements.