National Coalition for Health Care Calls for Expanded DME Competitive Bidding, Cuts in Medicaid Payments

Editor’s Note:  The National Coalition for Health Care (NCHC) has released a fiscal plan calling for a series of tax increases and spending cuts to reduce the deficit and limit raising health care spending.  The recommendations include two proposals which would further harm the DME industry, as discussed below.  NCHC’s member organizations are listed here.  The NCHC plan, “Curbing Costs, Improving Care: The Path to an Affordable Health Care Future” is attached here.

CRE is in the process of informing NCHC that their support of competitive bidding will result in less competition and higher prices because the alleged competitive bidding program is arbitary and opposed by academic experts in competitive bidding systems.

The two proposals that would directly harm the DME industry and further threaten the quality of care for people who depend of life-sustaining DME are:

1. Expand competitive bidding to additional categories of durable medical equipment in Medicare.  (NCHC Estimate of Savings: $7 billion over ten years)

From NCHC:

Medicare’s competitive bidding program should be expanded to the categories of durable medical equipment not included in the current program, including items such as nebulizers and ventilators. MedPAC has estimated that implementing such a policy or applying equivalent cuts to the existing payment schedule could save $7 billion over ten years.  However, competitive bidding should not be extended to custom orthotics, prosthetic limbs, and complex rehabilitative technology (CRT) power and manual wheelchairs and related seating systems. These are highly customized and service-oriented devices that serve the needs of beneficiaries with significant disabilities and do not lend themselves well to a competitive bidding model.

2. Adjust federal support for Medicaid durable medical equipment to reflect the lower competitively bid prices used in Medicare. (NCHC Estimated Savings: $2.8 billion in savings over ten years)

From NCHC:

Medicaid, as well as Medicare, should benefit from lower competitively bid prices. The Obama Administration’s FY 2013 budget has proposed reducing the rate at which the federal government reimburses state Medicaid programs for DME to the same level Medicare pays for that equipment. CBO has estimated that this policy change would save $2.8 billion over ten years. CMS and state Medicaid programs should monitor implementation of this policy to ensure that these reductions in DME reimbursement do not compromise access and quality of care.

According to Inside Health P0licy, the DME proposals “included in the administration’s 2013 budget and several other deficit reduction lists” as “one of the only pieces of low-hanging fruit left, despite industry opposition.”