Medicare to Introduce Competitive Bidding System
In the May 1st Federal Register, the Department of Health and Human Services proposed rule CMS-1270-P (pdf) for Competitive Acquisition for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) in the Medicare Program. The far-from-new idea is to introduce bidding programs to establish applicable payment amounts, through a transition done over several years and starting next year with 10 metropolitan areas, to be expanded to 80 in 2009. Competitive bidding demonstrations were done in Florida and Texas in 1999 and 2002 with substantial savings according to the Centers for Medicare and Medicaid Services (CMS) proposal. The administration will take comments until June 30, 2006.
This new set of rules could have a strong impact on pricing, not all of it beneficial. Cara Bachenheimer, vice president of government relations for Invacare, was quoted in the Washington Post as saying: “This will have a dramatic impact on this industry […] It encourages inappropriate low-balling [on prices], and it’s problematic for small suppliers.” The concern is whether small businesses will be able to compete as beneficiaries will only be able to get DMEPOS from contracted suppliers. Rural areas look likely to be excluded from the bidding process for lack of sufficient competition and to guarantee continued Medicare coverage across the country.
May 3, 2006 Related topics: Legal & legislative