Competitive Bidding Program for Durable Medical Equipment

Medicare Set-Aside Blog on March 25, 2008
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Starting in July 2008, CMS has instituted a pilot program where 10 of the largest Metropolitan Statistical Areas will challenge durable medical equipment suppliers (including prosthetic and orthotics suppliers) to submit bids to CMS.

Currently, CMS is paying the listed price for DME, but the new plan demands suppliers to submit such bids based on cost, volume, and/or the potential savings to Medicare beneficiaries. By 2009, the program is expected to expand to at least 70 Metropolitan Statistical Areas with an expectation that savings will be near $1 billion by 2009.

This is just one of many recent efforts to begin planning for Medicare’s future. Not only will it save beneficiaries money (they currently pay 20% of the cost of Medicare-covered DME), but it helps ensure Medicare, as an entity, can remain financially functional despite the rapidly increasing baby boomer population.

How will this affect MSAs? Look for costs to continue to decrease, saving insurers, attorneys, and injured persons money while encouraging healthy competition among DME suppliers.

Check in with us as we continue to follow this effort by CMS to protect Medicare’s interests and those of its beneficiaries.

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