A new report written by Leitten Consulting contends that the Centers for Medicare & Medicaid Services (CMS) should pivot away from its infamous competitive bidding program for durable medical equipment (DME) and instead focus on efficiently providing DME to improve beneficiary outcomes.
The report — The Case for Medicare Investment in DME Continues to Strengthen in 2024 — was authored by Brian Leitten, CEO of Leitten Consulting, and published by VGM & Associates.
In a Sept. 24 news announcement, VGM said, “The report highlights the cost of treatment versus prevention, revealing that the cost of treating injuries and illnesses due to the lack of DME far exceeds the cost of providing the necessary equipment.
“For example, every dollar spent on mobility DME can save Medicare $62.38 in treatment costs. Additionally, competitive bidding has drastically reduced the number of viable DME suppliers, thereby limiting access for beneficiaries and increasing long-term costs. With the growing trend towards home-based care, the role of DME in preventing hospitalizations and managing chronic conditions has become increasingly critical. Finally, the report reveals that investing in DME could potentially save Medicare up to $200 billion annually, substantially lowering overall healthcare expenditures.”
Competitive bidding may have run its course
Leitten recommended a major shift in how CMS has approached DME provision since the early 2000s. While the national competitive bidding program, which began in 2011, focused on saving money by reducing payments to DME providers, the report contended that timely DME provision would better meet beneficiary needs and ultimately save Medicare money.
“An ounce of prevention is now worth several pounds of cure,” said Leitten in the VGM announcement. “It’s time for Medicare to recognize the immense value of DME in improving patient outcomes and reducing costs.”
While the competitive bidding program in the beginning did reduce Medicare costs — by slashing provider payments, reducing the number of providers in business, and limiting access to DME — the report said evidence now “suggests that competitive bidding may have reached its natural end. For over five years, CMS has been unable to cobble together even a single effective round of competitive bidding.”
Instead, the report contended, a better strategy would be to consider DME not as a cost to be reduced as much as possible, but as a way to prevent more costly interventions, such as hospitalizations.
“Health care is in the midst of a seismic shift that will expand the value of timely providing DME to Medicare beneficiaries,” the report noted. “One key element is a shift in the location of providing care. In the very near future, up to 25% of the total cost of care for Medicare fee-for-service and MA [Medicare Advantage] beneficiaries will likely shift from traditional facilities (hospitals, outpatient clinics, physicians’ offices, skilled nursing facilities, urgent-care centers and emergency departments) to the home.”
“Our industry continues to be on the front lines of the fight to keep people in their homes, close to family and friends, and in the community where they want to live,” Ike Isaacson, SVP, VGM government relations, said in the announcement. “Our services save lives, and at the same time, they save money. This study further validates the need to promote prevention and early intervention of health challenges through fully funding the DME/HME [home medical equipment] services that enhance quality of life and reduce the costs of facility-based care.”
