CMS Expands Competitive Bidding System to 70 Cities
CMS on Tuesday announced that the second round of a new Medicare competitive bidding system for durable medical equipment will add 70 cities to the 10 cities included in the first round, CQ HealthBeat reports. The 70 additional cities include the three largest metropolitan areas in the nation: New York, Los Angeles and Chicago (Reichard, CQ HealthBeat, 1/8).
Acting CMS Administrator Kerry Weems said that the system, when fully implemented, would save Medicare and beneficiaries about $1 billion annually (Tubbs, Arkansas Democrat-Gazette, 1/9).
CMS also said that the program would limit fraud and reduce prices by about 20% (CQ HealthBeat, 1/8). Under the current system, CMS uses prior sales data to determine prices for durable medical equipment.
Weems said that the system leads to overpayments. The new system requires suppliers to have accreditation and to submit bids.
Only suppliers that submit bids less than a threshold established by CMS can participate in Medicare (Arkansas Democrat-Gazette, 1/9). CMS will announce the suppliers that qualify for the first round of competitive bidding in March, and the new prices should begin in the 10 cities in July.
New prices for the 70 additional cities will not begin until summer 2009. All suppliers that seek to submit bids must have accreditation by Sept. 30, 2009, but those that seek to submit bids in the second round must have accreditation before the deadline.
CMS might expand the system nationwide after 2009.
Opponents maintain that the system will force smaller suppliers to close, reduce choice for Medicare beneficiaries and limit innovation.
The Advanced Medical Technology Association has asked CMS to postpone the expansion of the system.
In response to concerns about smaller suppliers, CMS will allocate positions for them equal to 30% of the number of suppliers that meet the competitive bidding requirements in each city, agency officials said.
In addition, Weems said that smaller suppliers can form networks to compete (CQ HealthBeat, 1/8).