CMS Calls for Increased Competitive Bidding
CMS on Monday announced a proposed rule change to launch a competitive bidding program for durable medical equipment in 2007, CQ HealthBeat reports. CMS currently pays for durable medical equipment based on a listed price.
Under the proposed change, durable medical equipment companies would submit bids to CMS, which then would choose a supplier based on cost and volume or on the potential savings for beneficiaries. CMS estimated the proposed program could save taxpayers more than $1 million annually within five years.
According to CQ HealthBeat, the proposed change was called for in the 2003 Medicare law as part of a larger effort to implement competitive bidding for CMS payments. The law allows CMS to phase in the competitive bidding program, so that it can improve claims handling and related functions, such as educating providers about billing practices.
Federal officials chose to begin the overhaul with durable medical equipment because the area involves a relatively small number of claims -- 68 million in fiscal year 2004. CMS plans to implement competitive bidding to hospital and doctor claims after gaining experience with the durable medical equipment claims bidding.
The proposed rule -- which also includes a new fee timetable for home dialysis supplies and equipment and an explanation of the statutory eyeglass coverage exclusion. A final rule will be issued after a 30-day comment period and will be implemented in three phases beginning in 2007.
"[The proposed rule change] is another way in which Medicare is now using competition to bring lower-cost, up-to-date care to our beneficiaries," Mark McClellan, CMS Administrator, said (George, CQ HealthBeat, 4/24).