BALTIMORE — Medicare payment reforms, anti-fraud measures and other initiatives such as competitive bidding for DME will mean almost $120 billion in savings to the program over the next five years, according to a new CMS report.
A list of major areas from which those savings will come shows moving to payment systems that reward quality of care will save $55 billion, CMS said in the report. Further crackdowns on fraud and abuse, such as enhanced screening for Medicare enrollment and increased use of Recovery Audit Contractors (RACs), will save another $1.8 billion.
Also on the agency's list of savings: "Getting the best value for Medicare beneficiaries and taxpayers for durable medical equipment." Medicare currently overpays for DME, and that encourages fraud, according to the report. As a result of competitive bidding, CMS said, Medicare will save $2.9 billion through 2015, and $17 billion over 10 years. Beneficiaries will save an additional $11 billion in out-of-pocket costs.
"Both the Government Accountability Office and the HHS Inspector General have identified durable medical equipment as one benefit for which Medicare pays significantly more than other payers; and this overpayment makes the program more susceptible to fraud, abuse and unnecessary utilization," the report states.
But in a May 12 press release following the report, the American Association for Homecare vehemently rejected those "distorted assertions."
Labeling the notion a "myth" that Medicare overpays for home medical equipment, the reality is that "proponents of the bidding system have used out-of-date reimbursement rates and false comparisons of retail costs versus Medicare costs to argue their case," AAHomecare said.
"For many years, CMS has set reimbursement rates for home medical equipment through a fee schedule. Over the past decade, those reimbursement rates have dropped nearly 50 percent because of cuts mandated by Congress or imposed by CMS.
"The costs of delivering, setting up, maintaining and servicing medically required equipment in the home are obviously greater than the cost of merely acquiring the equipment," the association continued. "But Medicare does not recognize the costs of these services. So comparing the cost of the equipment to the larger cost of furnishing the full array of required equipment, supplies and services is false and misleading."
Under competitive bidding, AAHomecare said, faulty bidding rules encourage lowball bids that won't allow for "a sustainable process or a healthy pool of equipment suppliers."
According to AAHomecare President and CEO Tyler Wilson, "There's a reason why more than two dozen patient advocacy groups, 167 economists and nearly 100 members of Congress oppose this program: It undermines quality and increases costs. Because of this bidding program, beneficiaries will spend more time in expensive institutions, rather than in the far more cost-effective setting — their own homes."
Read the AAHomecare release in full.
Read the CMS report in full.