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ACA competitive bidding could save taxpayers $42.8B

According to a report released Wednesday by the Department of Health and Human Services, patients with Medicare are starting to save money on durable medical equipment (DME) through the Medicare competitive bidding program.

As the program expands under the Affordable Care Act (ACA), it could save taxpayers and beneficiaries $42.8 billion over the next 10 years. According to the report, the program saved $202 million in its first year in nine metropolitan statistical areas – a reduction of 42 percent in costs.

[See also: ACA extended free preventive services to 54M Americans]

"Thanks to the Affordable Care Act, we can expand this successful example of healthcare reform to include more areas and achieve savings on a national level over the next few years. People with Medicare across the country will get the medical equipment they need to live their lives, while saving them and other taxpayers money in the process," HHS Secretary Kathleen Sebelius said in a press release. "The law is already saving those with Medicare hundreds of dollars on their healthcare needs – from medical equipment to prescription drugs - and they will continue to save in the years to come."

The report also released results that show, after extensive monitoring by the Centers for Medicare and Medicaid Services (CMS), there have been no negative effects on the health of people on Medicare or their access to needed supplies and services.

Key information in the report includes:

• Seniors and people with disabilities in Medicare will directly save a projected $17.1 billion due to lower co-insurance for durable medical equipment and lower premiums for Medicare over the next decade, while taxpayers are projected to save an additional $25.7 billion through the Medicare Supplementary Medical Insurance Trust Fund because of reduced prices.
• Medicare beneficiaries in the nine areas had substantial reductions in their co-insurance for DME.
• Last year alone, people with Medicare saved up to $105 on hospital beds, $168 on oxygen concentrators and $140 on diabetic test strips.
• A real-time claims monitoring system, set up to ensure that access to supplies was not compromised, has found that people on Medicare continue to have access to all necessary and appropriate items.

[See also: DME bidding program puts out hospitals, physicians and beneficiaries]

The ACA expands Round 2 of the DME competitive bidding program from 70 to 91 metropolitan statistical areas across the country. CMS is evaluating bids from suppliers for the 91 areas. By 2016, all areas of the country will be included in the competitive bidding program.

Not everyone agrees with CMS that the bidding program has been a success.

"It is safe to say that the only organization that views the bidding system as a success is the federal agency in charge of its implementation," Tyler J. Wilson, president of the American Association for Homecare, told Healthcare Finance News in December.

According to AAH, 30 patient advocacy groups, 244 economists and auction experts and 145 members of Congress oppose the program, citing reduced access to care, flaws in the program design and negative impact on local jobs.

"In Round 1, the Medicare bidding program caused more problems than it solved," said Tyler. "Round 2 will just compound the disruption and dissatisfaction that is occurring right now with respect to beneficiaries and DME providers as well as physicians, case managers, discharge planners and others who help connect those who need good homecare with those who provide it."

[See also: DME bidding continues to haunt the homecare sector]

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