The Centers for Medicare and Medicaid Services on March 15 announced the new single payment amounts for durable medical equipment, prosthetics, orthotics and supplies and said it has sent out contract offers.
Medicare sets the payment rates for durable items and other supplies. Prior to the competitive bidding program, Medicare paid for these items using a fee schedule that was based on historic supplier charges from the 1980s, CMS said. These prices were much higher, CMS said.
Under the new system, CMS estimates it saved Medicare approximately $3.6 billion between 2013 and 2015.
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Companies bid in a competitive process to become suppliers in contracts effective on July 1, 2016 through December 31, 2018.
The 12,181 contract offers will be made to 637 bidders, CMS said. Ninety-three percent of bidders currently furnish items. Small suppliers, with gross revenues of $3.5 million or less, make up about 56 percent of those that will be offered contracts for what CMS calls Round 2 Recompete.
CMS will offer nine contracts for the national mail-order program, it said. Twenty-two percent of national mail-order contract offers are going to small suppliers, CMS said.
The national mail-order recompete for diabetes testing supplies will be implemented at the same time, CMS said.