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Life Health > Health Insurance > Medicare Planning

Medicare expands competitive bidding

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Following months of protest, the Centers for Medicare & Medicaid Services (CMS) is forging ahead with plans to expand its competitive bidding program, which is designed to lower costs for durable medical equipment, prosthetics, orthotics and other supplies. Various advocacy groups as well as members of Congress have objected to the effort on the grounds that it would reduce access to care.

The competitive bidding program encourages suppliers to set lower prices for certain medical equipment and supplies. “We’re taking steps that will save Medicare, seniors and taxpayers $28 billion over 10 years,” said CMS administrator Donald M. Berwick. “Medicare is paying much more than the private sector for equipment like wheelchairs and walkers. By expanding our successful competitive bidding program, we can ensure that Medicare pays a fair rate for these goods.”

So far, the program, which was implemented for nine product categories in nine areas of the country, has saved the program 35 percent compared with previous rates. Phase two of the program will expand to 91 major metropolitan areas.

Beneficiaries will see no immediate effect from the expansion and may continue to use their current suppliers. Just as they did with phase one of the program, CMS will conduct an outreach effort to keep beneficiaries apprised of any changes.

“The success we’ve had in the first phase tells us that we can achieve these savings with no disruption for patients’ access and no negative effect on patients’ health,” said deputy CMS administrator Jonathan Blum. “We remain confident in our bidding methodologies that will produce tangible savings while ensuring adequate choice of qualified suppliers.”

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