Medicaid could have saved 23% by using bid pricing

Monday, January 27, 2014

BALTIMORE – State Medicaid programs could have saved 23%, or $62 million, if they had paid the median competitive bidding rates for incontinence supplies in 2012, according to a report from the Office of the Inspector General (OIG). An added bonus, the OIG states: increased beneficiary access, increased product quality and program control. “However, states reported encountering initial challenges with their competitive bidding programs, and six states attempted to establish competitive bidding but did not fully implement it,” the OIG states. Overall, state Medicaid programs spent $266 million on nine types of disposable incontinence supplies, the OIG found.


A review of the report shows that the OIG does not appear to take into consideration that some state Medicaid programs are mandated to discount a percentage off the Medicare rate or waive copayments.  Therefore, if competitive bidding is supposed to achieve a market-based reimbursement rate, a discount off the single payment amount would price these products below their market price.