The Centers for Medicare & Medicaid Services (CMS) today has announced 799 providers that have been awarded contracts as part of Round Two of national competitive bidding program to provide home medical equipment to beneficiaries in 91 competitive bidding areas. Round Two is slated for a July 1 implementation.
CMS announced the bid rates at the tail-end of January, with the nine product categories for DME undergoing a staggering average cut of 45 percent and mail order supplies suffering an average 72 percent cut.
All told, CMS awarded 13,126 Round Two contracts to the new contract holders situated in 2,988 locations. The National Mail-order program contract suppliers have 52 locations, which will provide serve beneficiaries nationwide via mail or other home delivery, CMS added.
The winners were selected from last year’s 48,424 Round Two bids made by a total of 2,641 providers. CMS received 245 bids for the national mail-order competition.
CMS says 90 percent of contract suppliers are already established in either the competitive bidding area or the product category for which it won a contract, or both. CMS also says that providers with gross revenues of $3.5 million or less hold approximately 63 percent of the Round Two contracts.
Initial Industry Reaction
In its release announcing the contracts, CMS touted the savings Round One of the program has already garnered, which it claims have totaled $202 million in its first year. It also claimed that it expects Round One to save the Medicare Part B Trust Fund an estimated $25.7 billion between 2013 and 2022, and save beneficiaries $17.1 billion due to lower coinsurance and premium costs.
American Association for Homecare President Tyler Wilson responded to CMS’s announcement stating that the agency was glossing over the program’s multiple structural problems that have been explained by various experts, most notably more than 250 economists with expertise in auction models, including two Nobel Laureates.
“In its announcement, the agency spins a far from accurate picture regarding all the supposed positives for Medicare,” Wilson wrote. “While AAHomecare expects dedicated home medical equipment providers to give full service to Medicare beneficiaries in Round Two areas, the bidding program has created a system that is likely to falter. Industry leaders and outside experts alike believe there will be unneeded hardship on beneficiaries and on homecare providers as Round Two gets underway on July 1.
“Access to care and the quality of the care delivered will certainly suffer as most of the contract reimbursement rates are well below cost for the providers,” he continued. “As homecare businesses struggle under unsustainable payment rates, their ability to meet the needs of beneficiaries will be undermined.”
Finding Contract Holders
To find Round Two contract holder, the Competitive Bidding Implementation Contractor, Palmetto GBA, has released a PDF listing all the contract holders at http://www.dmecompetitivebid.com/Palmetto/Cbicrd2.Nsf/files/Rd2_NMO_Contract_Supplier_List.pdf/%24File/Rd2_NMO_Contract_Supplier_List.pdf.
Also, CMS’s online searchable supplier directory is already showing which providers are holding competitive bidding contracts. To find the contract-holders for specific categories in specific areas, visit http://www.medicare.gov/supplierdirectory/search.html and enter the zip code in question; select up to five product categories; and then scroll down and click the green “search” button.