Medicare's Competitive Bidding Demonstration for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
Section 4319 of Public Law 105-33, the Balanced Budget Act of 1997 (BBA 1997), directs the Secretary of Health and Human Services to report annually on the impact of competitive bidding projects authorized in the BBA. This report responds to the BBA requirement to "evaluate the impact of the demonstration projects on Medicare program payments, access, diversity of product selection, and quality" (Social Security Act 1847 (C)(1)-Evaluations).
The demonstration covers five product lines within DMEPOS, including oxygen. A total of 16 winning suppliers began providing demonstration products and services in Polk County on October 1, 1999. A new fee schedule for Polk County replaced the statewide Medicare DMEPOS fee schedule. Based primarily on evaluation activities during the first 9 months of demonstration operations, the report finds that the demonstration is proceeding smoothly and without serious adverse impacts in any of the evaluation areas. The Medicare fees that resulted from the bidding competition suggest annual savings of 17 percent are likely for the products and services involved in Polk County. Fees obtained through bidding were almost always lower than the Florida statewide fee schedule, except in the surgical dressings category. It is likely that the fees for surgical dressings would have been lower under an improvement in the technical procedure for summarizing each bidder's prices into a single bid for comparison purposes. This change is to be implemented in future demonstration sites. …