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CMS expands competitive bidding program despite controversy

The Centers for Medicare & Medicaid Services (CMS) announced Wednesday operational details for the next stage in its competitive bidding program despite ongoing opposition from patient advocacy groups, economists and 145 members of Congress.

[Also: Competitive bidding system could mean the end of MA]

The Medicare Competitive Bidding Program for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) was expanded by the Affordable Care Act and CMS expects it will save Medicare, seniors and taxpayers more than $28 billion over 10 years.

According to CMS, the first phase of the program has saved Medicare 35 percent compared to the fee schedule and resulted in lower cost for Medicare patients so far in 2011.
“Today marks another step forward in our progress towards obtaining fair prices for equipment like wheelchairs and walkers,” said CMS Administrator Donald M. Berwick, MD, in a statement. “We are looking forward to a robust competition that will achieve better value and preserve access for our beneficiaries.”
Under the program, DMEPOS suppliers compete to become Medicare contract suppliers by submitting bids to provide certain items in competitive bidding areas (CBAs).
The first phase of the program was implemented for nine product categories in nine areas of the country on Jan. 1, 2011. 

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[Also: Medicare bidding called 'Penny wise, pound foolish']

CMS released the detailed schedule for Round 2 bidding on Wednesday. Registration will begin on December 5, and the 60-day supplier bidding period will begin in late January of 2012.
Round 2 expands the program to 91 additional metropolitan areas, and the new prices are expected to take effect on July 1, 2013. A National Mail Order Competition to help bring down prices for mail order diabetic supplies will coincide with the Round 2 timeline. 

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,” said Tyler J. Wilson, president of the American Association for Homecare.

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.”

Despite this ongoing controversy, CMS is moving ahead with Round 2.
“We have considered feedback from many stakeholders to implement process improvements to make the competitive bidding program even stronger,” said Jonathan Blum, deputy CMS administrator and director of the Center for Medicare, in a statement. “In addition to the enhancements we’ve made to our bidder education program, we will be strengthening our rigorous bid evaluation process by increasing our scrutiny of bids.”
The Round 2 categories of products are similar to those in Round 1, with some additions. The Round 2 product categories are:

· Oxygen, oxygen equipment, and supplies;
· Standard (power and manual) wheelchairs, scooters, and related accessories (a new category that combines all mobility devices);
· Enteral nutrients, equipment, and supplies;
· Continuous Positive Airway Pressure (CPAP) devices and Respiratory Assist Devices (RADs) and related supplies and accessories;
· Hospital beds and related accessories;
· Walkers and related accessories;
· Negative Pressure Wound Therapy pumps and related supplies and accessories (new category);
· Support surfaces (Group 2 mattresses and overlays).

Beneficiaries may continue to use their current suppliers at this time. Similar to the successful implementation of Round 1 of the program, CMS will conduct extensive outreach to beneficiaries in the Round 2 areas prior to the new program taking effect.