Reports released last week by the Department of Health and Human Services Office of Inspector General (“OIG”) and Government Accountability Office (“GAO”) indicate that the Centers for Medicare & Medicaid Services’ (“CMS”) durable medical equipment competitive bidding program (“CBP”) round one rebid is generally on track in meeting the program’s requirements.

The OIG’s report, released April 9th and titled “CMS Generally Met Requirements in the Durable Medical Equipment Competitive Bidding Round 1 Rebid Program,” examined payments made to 266 durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) suppliers that had been awarded contracts by CMS under the competitive bidding program.  The report found that CMS had met the program’s requirements for 255 of the suppliers.  However, CMS did not follow correct procedures for the other eleven suppliers.  Nine of the eleven suppliers did not meet a program requirement to submit full financial documents along with their Request for Bids.  For the remaining two suppliers, CMS improperly used bids to determine the calculation of a single payment amount.

The GAO’s report, released April 8th and titled “Second Year Update for CMS’s Durable Medical Equipment Competitive Bidding Program Round 1 Rebid” found that DME utilization decreased during 2012 but did not compromise beneficiaries’ access to DMEPOS services.  The report stated that decrease indicated that the competitive bidding process “may have curbed previous inappropriate distribution of some CBP-covered items in competitive bidding areas.”

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created the competitive bidding program, which was designed to replace payments from a fee schedule for DMEPOS suppliers with single amounts calculated through a bidding process.  Round one of the rebid began in January 2011, and round two of the rebid began in July 2013.  The reports released last week analyzed the round one rebid process.

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