Controversial Medicare Bid Program Takes Next Step

From: KCUR.org 893.FM Kansas City Public Media

By Bryan Thompson

Medicare patients who have diabetic testing supplies delivered to them experienced some changes this week.

It’s all part of an effort by the Medicare program to save money and cut down on fraud. But some people are worried about unintended consequences.

A public services announcement issued by Medicare attempts to lay out the changes for diabetic Medicare recipients:

“If you are covered by Original Medicare, and have diabetic testing supplies delivered to your home,” the narrator says. “You should know about a new mail-order program for diabetic testing supplies. It will allow you to continue getting quality supplies, while saving money.”

Eighteen choices

The new program requires all mail-order diabetic testing supplies to be sold through 18 private companies. These companies submitted bids that will save the Medicare program about 72 percent, compared to the reimbursement companies have been getting on those supplies.

Julie Brookhart is a spokeswoman for Medicare’s regional office in Kansas City.

“Medicare is paying about $78 per hundred test strips and lancets,” she says. “Because of competitive bidding, Medicare will pay about $22 for that same hundred box.”

The old prices—set by Congress—simply hadn’t been reset to reflect changes in the market over the last two decades. And since Medicare beneficiaries pay a percentage of the approved charge themselves, Brookhart says they’ll share in the savings from competitive bidding, too.

“They’re gonna be paying 20 percent of the $22, or a little over $4 for that box. Before competitive bidding, they were paying around $16, and up.”

But some people think the mail-order program goes too far.

It mandates that all home delivery of diabetic testing supplies for people on Medicare be done through the 18 nationwide contractors.

Peter Stern heads the Kansas Pharmacy Service Corporation, which serves pharmacies all across Kansas. He says that’s problematic for hometown pharmacies that offer home delivery.

“Whether that patient is on a farm 10 miles outside of the town where you have your pharmacy, or that patient may happen to live right across the street from the pharmacy, you will not be allowed to deliver that to their home,” he says.

Stern fears what might happen when human nature kicks in.

The mail-order component

“People forget. You know, they say I should have ordered my new supplies, and they’re not gonna come for five days. I’m gonna have three days where I can’t test my blood sugar. And I can’t get into town to pick those up, and nobody in my family is around, so they’re not gonna be able to test themselves for three days? That’s a problem.”

Especially with a condition like diabetes.

Diabetics have to know their blood sugar level to know how much insulin to take. Too much—or too little—could result in a severe reaction, possibly even death.

Local pharmacists say it can take up to two weeks from the time an order is placed for it to arrive by mail. What’s more, Jeff Denton, one of the owners of B&K Prescription Shop in Salina says mail-order can’t provide the level of personal service some customers need.

“There’s not gonna be anybody here in town to be able to service them,” says Denton. “We show people how to use their meters. How to use the strips. Some people we have to show several times before they get it. How are we gonna do that on mail-order?”

The nationwide mail-order program for diabetic testing supplies is part of a larger effort to introduce competitive bidding for all kinds of durable medical equipment and prosthetics provided by Medicare. This includes things like wheelchairs, walkers, and oxygen equipment.

The program began with a test run in nine markets, including Kansas City. The expectation is that it will eventually apply to all Medicare clients, just like the nationwide program for diabetic testing supplies.

Members of congress speak out

Some in Congress are tying to apply the brakes, though. That effort is led by Republican Glenn Thompson, of Pennsylvania.

“This round two of the competitive bidding program really just is a train wreck that is unraveling right before our eyes,” he says.

Thompson’s letter asking the Medicare administrator to delay the program is supported by representatives Lynn Jenkins and Mike Pompeo, of Kansas, and William Lacy Clay, Jr., Vicki Hartzler, Billy Long, and Blaine Luetkemeyer, of Missouri.

But despite the concerns of a majority of House members, Medicare officials are moving forward.

That’s led Congressman Thompson to quip that the letters C-M-S actually stand for something other than the Centers for Medicare and Medicaid Services.

“Unfortunately, the attitude that we’re seeing from CMS, I’ve come to the conclusion that my new definition for CMS is that Consumers Must Suffer,” he says.

Thompson is now co-sponsoring legislation that would force CMS to delay the bidding program. That bill has not made it out of committee so far.

Julie Brookhart, the agency’s spokeswoman in Kansas City, says she can’t respond to the specifics of the letter to the CMS administrator, but she can say that there were no significant problems in round one of the competitive bidding program.

“It worked for round one, and with all of our history, we expect it to work very well in round two, as well,” she says.

So for now, at least, round two of Medicare competitive bidding is in effect. To be clear, Medicare clients can still pick up diabetic testing supplies at their local pharmacy—provided that pharmacy agrees to accept Medicare’s new, lower payment rates. But if you want those supplies delivered, your only choice is to go through one of the 18 nationwide mail-order companies.