DMEPOS Competitive Bidding Update

Medicare Set-Aside Blog on June 6, 2008
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Despite the recent controversy over the effects of the new Medicare DMEPOS competitive bidding program(durable medical equipment, prosthetics, orthotics, and supplies), the Centers for Medicare and Medicaid Services (CMS) have announced the first round of contract suppliers. The purpose of the program is to reduce out-of-pocket costs to Medicare beneficiaries while increasing the efficiency and service of the supplier market. According to CMS, the DMEPOS competitive bidding program offers savings to Medicare beneficiaries ranging from 14% on negative pressure wound therapy devices up to 43% on diabetic supplies.

One of the biggest concerns in the industry is that smaller companies will bid low in an effort to retain business, but will ultimately be unable to stay afloat with the reduced financial resources and eventually be forced to close up shop. Another major concern involves the affordability of oft-needed and life-saving supplies. As it stands, suppliers are able to make oxygen and diabetes supply deliveries on an as-needed basis to beneficiaries; however, with the pending changes, it is expected that suppliers will be unable to fund these frequent deliveries and will instead be forced to make weekly, or even monthly, delivery schedules.

The first round of DMEPOS competitive bidding becomes effective July 1, 2008, and the second round is anticipated to take effect in the summer of 2009, at which point 70 additional cities will be added. Suppliers must become accredited by CMS standards no later than September 30, 2009. 

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