Bid program reduces waste, but little else

Thursday, May 24, 2012

BALTIMORE – Diabetes stakeholders and CMS officials don’t see eye to eye on much, but they do agree there’s a lot of waste in the mail-order supply market. 

“A lot of pharmacists routinely have patients coming to them with excess supplies, often diabetes supplies,” said Kevin Schweers, senior vice president of government affairs for the National Community Pharmacists Association (NCPA). “Everybody is trying to solve the problem of rising healthcare costs and mail order (is seen as) a panacea. What is overlooked is the frequent rife waste that is associated with it.”

In its April 18 report about Round 1 savings, CMS stated that, during the first year of competitive bidding, there were $51 million in savings related to diabetes testing supplies, and that there was a drop in the utilization of mail-order supplies. The agency contacted beneficiaries in the first nine competitive bidding areas who had no claims for the supplies in 2011. Those beneficiaries told CMS that they had more than enough already.

In its report, CMS stated:

“This would suggest that beneficiaries received excessive replacement supplies before they became medically necessary. CMS concludes that the competitive bidding program may have curbed inappropriate distribution of these supplies that was occurring prior to implementation.”

That’s about the only part of CMS’s report that the NCPA agreed with. Based on its own analysis, NCPA suggested that another reason for the drop in mail-order utilization could be beneficiaries’ preference for face-to-face counseling. Beneficiaries can choose whether to obtain their supplies from a mail-order contract winner or from a local pharmacy or HME provider.

The NCPA also refuted CMS’s claim that there were no negative health outcomes as a result of the program. It could take longer than one year for negative health outcomes to become apparent, it said.