Regulators clash with suppliers over effectiveness of competitive bidding program for durable medical equipment

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Federal officials maintain that its competitive bidding program for durable medical equipment is operating successfully, but some industry suppliers disagree.

Officials from the Centers for Medicare & Medicaid Services testified Wednesday to the House Ways and Means Health Subcommittee that they are satisfied with Round 1 of the bidding program. Laurence D. Wilson, director of CMS's chronic care policy group, told the committee that CMS estimates that the program saved Medicare $202.1 million, or a 42% reduction from the fee schedule in its first year of operation.

Government Accountability Office investigators determined that while it's too early to identify how the program affects beneficiaries, CMS's “ongoing monitoring activities generally indicate that beneficiary DME access and satisfaction have not been affected,” according to a GAO report released Wednesday.

But some suppliers and long-term care advocates have criticized the program, saying that there will be less suppliers for more beneficiaries in the long run, and that the system forces long-term care facilities to accept the lowest bids.

However, at least one supplier testified that CMS has done a good job including small and medium-size suppliers, and that he expects volume to increase.

Click here for the GAO report, and here for more on the House hearing.

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