Wall Street Journal Examines Potential Effects Of Medicare Competitive Bidding Program For Durable Medical Equipment

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Medical Devices / Diagnostics
Article Date: 20 Mar 2009 - 6:00 PDT

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The Wall Street Journal on Thursday examined "Medicare's second attempt at putting a competitive bidding program in place" for durable medical equipment and the potential effects on access to services for beneficiaries (Martinez, Wall Street Journal, 3/19). CMS attempted to implement the program last year, but a law enacted last summer delayed the initiative and required the agency to repeat the initial bidding process. In February, CMS announced plans to implement the program on April 19 (Kaiser Daily Health Policy Report, 2/23).

According to the Journal, the program likely will reduce costs for Medicare and beneficiaries, who pay 20% of the cost of DME, but suppliers and some patient advocacy groups have raised concerns that "it also may mean new hassles for patients." In addition, some Medicare beneficiaries "worry about no longer being able to do business with providers they have come to rely on for lifesaving equipment," the Journal reports.

Tyler Wilson -- president of American Association for Homecare, which represents DME suppliers -- said, "Competitive bidding is going to eliminate 90% of home care providers," adding, "The result is going to be lower quality and lower access to care for seniors and people with disabilities." In addition, AAH officials said that the program will reduce costs for Medicare by only a small amount. Expenditures for DME will account for less than 2% of the estimated $500 billion budget for Medicare this year, they said.

Laurence Wilson, director of the chronic care policy group at CMS, said that the program will provide "value to Medicare and its beneficiaries, as well as taxpayers" and ensure that beneficiaries have access to needed DME. CMS officials also said that the program would reduce costs for Medicare by $1 billion annually (Wall Street Journal, 3/19).

Medical Imaging Services
In related news, CQ HealthBeat on Wednesday examined how "one of the more intense battles this year" on Medicare reimbursement rates "will be waged over medical imaging, an industry that says it has been hit too hard by Medicare cuts already and one that offers doctors a lucrative way to collect payments from a Medicare program they otherwise say underpays them." In a report issued earlier this month, the Medicare Payment Advisory Commission asked Congress to direct the HHS secretary to "increase the equipment use standard for expensive imaging machines from 25 hours to 45 hours per week" over concerns about the "diffusion of costly imaging machines because more machines are associated with higher overall volume."

According to CQ HealthBeat, "MedPAC analysts have long fingered advanced medical imaging such as MRI, CT, and PET scans as chief culprits in fast-rising Medicare outlays for physician services, arguing that the services are so lucrative that too often they are ordered without medical justification" (Reichard, CQ HealthBeat, 3/18).

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.

© 2009 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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