Small Medical Equipment Suppliers Criticize New CMS Rule

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Medical Devices
Article Date: 16 Jan 2008 - 10:00 PDT

email to a friend   printer friendly   view / write opinions   rate article

The Pittsburgh Post-Gazette on Friday examined how a new CMS competitive bidding rule "has some small medical suppliers ... worried that they'll be locked out of a market that historically has provided a third or more of their business" (Toland, Pittsburgh Post-Gazette, 1/11).

Under the current system, CMS uses prior sales data to determine prices for durable medical equipment, which acting CMS Administrator Kerry Weems says leads to overpayments. The new system requires suppliers to have accreditation and to submit bids. Only suppliers that submit bids less than a threshold established by CMS can participate in Medicare (Arkansas Democrat-Gazette, 1/9).

The Post-Gazette notes that the rule "theoretically will reduce the price Medicare will pay for 'durable medical equipment' by up to 20%, a tight shave for small businesses that don't buy equipment in bulk." Providers that are considered small businesses say that the new rule will favor large suppliers. The rule also will create a list of "authorized" Medicare providers, with small businesses guaranteed 30% of the total business, according to the Post-Gazette. Michael Reinemer of the American Association for Homecare said under the new rules, several thousand suppliers will be cut from the nationwide list of about 20,000. "Our fear is that it may create a sort of rush to the bottom, in terms of quality," Reinemer said (Pittsburgh Post-Gazette, 1/11).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.