CMS announces Round 2 pricing

BALTIMORE, Md., Jan. 30, 2013—The Centers for Medicare & Medicaid Services (CMS) has announced 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. 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.

Medicare beneficiaries across the country will save an average of 72 percent on diabetic testing supplies under a national mail-order program starting at the same time. A full list of the new prices is available here.

“This program has already saved millions for taxpayers and beneficiaries while maintaining access to care,” said CMS Acting Administrator Marilyn Tavenner. “We look forward to building on this success by serving more beneficiaries, increasing savings and helping to ensure the long-term sustainability of Medicare.”

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.

Importantly, the program has maintained beneficiary access to quality products from accredited suppliers in the nine areas where it is currently operating; extensive real-time monitoring data have shown successful implementation with very few beneficiary complaints and no negative impact on beneficiary health status based on measures such as hospitalizations, length of hospital stay, and number of emergency room visits compared to non-competitive bidding areas. CMS will employ the same aggressive monitoring for the MSAs added in Round 2.

In its first year of operation in the nine areas of the country where the program is currently operating, competitive bidding saved Medicare approximately $202.1 million. A complete list of the 91 areas where the program is expanding is available here.

“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.”

Additional information on the competitive bidding program is available at www.cms.gov/DMEPOSCompetitiveBid.