Medicare Slows Down Select DME Reimbursements

Medicare beneficiaries in nine areas of the country who use certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) could see average price reductions of about 32% off the current cost of those items come Jan. 1, 2011. The savings will be realized through the first round of a new competitive bidding program to determine the price Medicare pays for the equipment.

The program, which replaces Medicare's existing fee schedule amounts with market based prices, is expected to save more than $17 billion over 10 years. It will ensure "continued access for beneficiaries to high quality products" from accredited suppliers that "meet stringent quality and financial standards---which help to reduce fraud," according to Jonathan Blum, Centers for Medicare and Medicaid Services' deputy administrator and director of the Center for Medicare.

The first round of the program is scheduled to begin on Jan. 1, for beneficiaries in Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, CA. Suppliers that wished to participate in the program submitted bids last year. CMS plans to announce the contract suppliers in September once all contracts have been finalized.

As part of the first round of the competitive bidding program, price reductions are expected among frequently used items such as an oxygen concentrator, a semi electric hospital bed, and a typical monthly supply of 100 diabetic test strips and 100 lancets.

To take advantage of the savings, Medicare beneficiaries living in the nine communities who use certain medical equipment and supplies may have to choose a new Medicare contract supplier if they wish to have Medicare help with payment. Medicare said it will work with local partners and healthcare providers to inform beneficiaries about the changes.