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[News] DME Payment Amounts Slashed in Round 2 Competitive Bidding
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SuperSleeper Offline

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Post: #1
DME Payment Amounts Slashed in Round 2 Competitive Bidding
I'm not quite sure what's going on here... Dont-know if anyone can make sense of this, please post:



Payment Amounts Slashed in Round 2 Competitive Bidding

The Centers for Medicare and Medicaid Services (CMS) released new, lower Medicare prices that will go into effect this July in a major expansion of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. Reimbursement rates for certain durable medical equipment will be, on average, 45% lower than the current rates. CPAP devices were among the product categories with the steepest cuts at 47%.

The CMS Office of the Actuary estimates that the program will save the Medicare Part B Trust Fund $25.7 billion and beneficiaries $17.1 billion between 2013 and 2022. Medicare beneficiaries in 91 major metropolitan areas will save an average of 45 percent for certain DMEPOS items scheduled to begin on July 1, 2013.

"We rigorously reviewed all bids using our bona fide bid process and ensured that only accredited suppliers that met financial standards and applicable licensure requirements are being offered contracts. This process will ensure that beneficiaries have access to the equipment they need at fair prices," said Jonathan Blum, deputy CMS administrator and director of CMS's Center for Medicare. "We will continue to monitor the program closely as it expands to ensure the same success we saw in the program last year, with beneficiaries continuing to have access to all the services they need, while paying a much lower price."

Medicare's competitive bidding program replaces its existing fee schedule amounts in selected areas with prices based on suppliers' bids, saving money for taxpayers and beneficiaries while preserving access to quality products from accredited suppliers. Using market-based prices set through competition will help ensure the long-term sustainability of the Medicare program. Small businesses represent over half of the winning suppliers in these 91 metropolitan areas.

Fair use applies, from:
http://www.sleepreviewmag.com/news/18301...e-bidding/

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02-06-2013 03:30 PM
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JJJ Offline

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Post: #2
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
I don't fully understand it, but I do know that Medicare will not pay more than a set amount for a given code procedure or device. Furthermore, if the provider agrees to accept a Medicare patient, the provider must accept the Medicare amount as payment in full, and cannot charge the patient more than the allowable co-payment.

As an example, about three years ago I had to spend a couple of days in intensive care. The total bill was $31,000, my co-pay was $1,100, Medicare paid $14,500, and the hospital and doctors ate the rest. By law, since they accepted me, they must settle for what Medicare will pay plus the patient co-pay.

I live in a fairly high cost area of the country. There are only a handful of primary care physicians here who will accept Medicare patients with only A and B coverage. Most require that you have a supplemental private insurance policy. When I visit my primary care physician he loses money because I do not have a supplemental policy and the amount he can charge is not enough to cover his costs of operation.

So my take on the article is that Medicare is reducing the amount they will pay DMEs for the equipment. DMEs are not allowed to charge the patient for the difference. All they can charge the patient for is the allowable co-pay.

Most private insurance carriers in the U.S. follow Medicare guidelines, although some will pay more, depending on the procedure or product.

As for what effect the new Medicare policy will have on DMEs (and indirectly on us), I have no idea.
02-06-2013 04:47 PM
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PaulaO2 Offline
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Post: #3
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
Quote:We rigorously reviewed all bids

Not rigorously enough or they'd realize that by "renting" the machine, they actually are paying for 3 or so before it is done.

Other than that, are they saying we will be limited to the lowest bidder in terms of equipment??

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INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
02-06-2013 04:49 PM
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JJJ Offline

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Post: #4
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
(02-06-2013 04:49 PM)PaulaO2 Wrote:  
Quote:We rigorously reviewed all bids

Not rigorously enough or they'd realize that by "renting" the machine, they actually are paying for 3 or so before it is done.

I wonder how true that is. Consider the high percentage of patients who are prescribed a CPAP and refuse to tolerate it. If Medicare paid cash for each of those machines, might they not be out more in the long run than if they rent the machines for the first few months?

I don't have the figures to analyze this exactly. I hope that Medicare accountants have figured out exactly how many months of rental optimizes the lowest overall cost to Medicare. But I'm not optimistic that they actually know what they are doing. Sad
02-06-2013 05:19 PM
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PollCat Offline
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Post: #5
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
My gut feeling is that CMS is going to deal directly with the manufacturers, thereby 'saving' the Government the expense of the retailers' profits. Having dealt with CMS last year when I bought my S9, I do not have a warm and fuzzy feeling about their capabilities of providing us/patients with any savings.


INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA.
INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
02-06-2013 06:46 PM
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JJJ Offline

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Post: #6
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
(02-06-2013 06:46 PM)PollCat Wrote:  My gut feeling is that CMS is going to deal directly with the manufacturers, thereby 'saving' the Government the expense of the retailers' profits. Having dealt with CMS last year when I bought my S9, I do not have a warm and fuzzy feeling about their capabilities of providing us/patients with any savings.

Do you mean that CMS will buy the machines from the manufacturers and distribute them to patients directly? If so, how will the patient be instructed in the use of the machine? Will the government send out an instruction sheet? Will it be written by the same people who write the instructions for tax forms?

If so, this will save CMS a fortune, as the non-compliance rate skyrockets.
02-06-2013 08:45 PM
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JJJ Offline

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Post: #7
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
They would also save a ton of money of they'd drop the prescription requirement. Just look at what has happened to the prices of drugs as soon as they went over the counter.
02-06-2013 09:47 PM
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TheWerkz Offline

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Post: #8
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
(02-06-2013 03:30 PM)SuperSleeper Wrote:  Medicare's competitive bidding program replaces its existing fee schedule amounts in selected areas with prices based on suppliers' bids, saving money for taxpayers and beneficiaries

It sounds great to me!

Since Medicare is currently paying $1500.00 for a CPAP, now they'll only have to pay around $800.00 which is closer to what on-line suppliers sell it for, the DME's will have to be competitive for a change and stop bilking the taxpayers so much.
02-07-2013 01:57 AM
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aehjr Offline

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Post: #9
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
It doesn't sound as great to me. I am due for a CPAP replacement soon and was planning to use the approach mentioned here regards reimbursement and CPAP/ APAP being the same reimbursement code. As best as I can determine from perusing the supplier websites, I'd be able to get a new S9 Autoset with all the acccessories for $1100-1200 range. When the reimbursement was $1500, I had a shot at getting it through my insurance. With reimbursement cut to $800, I'll never talk a DME into getting me the auto adjusting device.
Given the reduced profit margin, this will increase the odds that (even for a brick), the DMEs will be providing refurbished machines rather than new ones. I only realized a few weeks ago that my original machine (Respironics ProM) was a refurb when I looked at the bottom of the machine. MY DME provider made a tidy profit on that one.
02-07-2013 12:14 PM
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Sleepster Offline
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Post: #10
RE: DME Payment Amounts Slashed in Round 2 Competitive Bidding
(02-06-2013 03:30 PM)SuperSleeper Wrote:  I'm not quite sure what's going on here... Dont-know if anyone can make sense of this, please post:

It looks to me like DME's have been overpaid in the past and this is an adjustment to correct that. We're probably going to see a lot of DME's going out of business as a result of this and that may mean that insurance companies will now have to allow patients to use online DME's.

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INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
02-09-2013 03:19 PM
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