Magazine article Drug Topics

DME Dealers Dread Prospect of Competitive Bidding

Magazine article Drug Topics

DME Dealers Dread Prospect of Competitive Bidding

Article excerpt


Suppliers of durable medical equipment (DME) should be aware that Medicare is getting closer to implementing a national competitive bidding program. Under competitive bidding, the program will award contracts for particular items or services to providers who submit lower bids.

In addition to a House bill (H.R. 4954) passed in June, proposals for national competitive bidding are included in two recently introduced Senate bills. The first bill (S. 3018) was introduced in September, and the second bill (S. 3098), also known as the Graham-Gramm bill, was introduced last month.

There are many differences among the bills. For one, under the Graham-- Gramm bill, competitive bidding would cover the following items: DME, off-the-shelf orthotics, surgical dressings, splints, casts, other devices in section 1861(s)(5), and infusion therapy. The previous Senate version of the legislation put these items under a mandatory demonstration project.

Another difference is that the first Senate bill requires competitive bidding to take place in Metropolitan Statistical Areas (MSAs) with populations over 500,000 that will have "probable savings." The House bill gives the Health & Human Services (HHS) Secretary authority to exempt areas that may have small populations and exclude items and services not likely to result in "significant savings."

Under the Graham-Gramm bill, the competitive acquisition area should be an MSA or within an MSA. However, population size is not specified. Therefore, more areas would be eligible under this version.

While both bills call for an annual report that would cover savings and access under the competitive bidding program, the House bill calls for a study of beneficiary satisfaction, and the Senate bill calls for the evaluation of the diversity of product selection available to the beneficiaries.

The Coalition for Access to Medical Services, Equipment, and Technology (CAMSET) was formed in June to oppose competitive bidding. The coalition is concerned that the expansion of competitive bidding from two ongoing demonstration projects to a national policy threatens to undermine quality of care, restricts patients' choice of service providers, stifle the development of new technology, and drive suppliers out of operation.

The American Association for Homecare's president and CEO, Tom Connaughton, who chairs CAMSET, told Drug Topics, "There are about 1,900 DME codes that may be involved in competitive bidding, so that's a lot of products. If I were the drugstores, I'd be upset about things like blood glucose strips. …

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