Diabetes: Fewer suppliers, lower pricing amp up concerns

Over three years, CMS has reduced the number of suppliers by 99%
Friday, May 6, 2016

YARMOUTH, Maine – CMS halved the number of contracts it offered in the upcoming national mail-order program for diabetes testing supplies and stakeholders say the impact on access to service and products could be “devastating.”

“For people who have chronic illness, less convenience and fewer companies means less compliance, which equals worse outcomes,” said Tom Milam, an industry consultant.“It’s a straight line.”

The agency awarded nine contracts in the mail-order category—100% of those offered—as part of a new phase of the program that kicks off July 1.

That’s significantly lower than the 20 or so it offered the first time around.

“Over a period of three years, that’s a 99% reduction in suppliers, from 1,000 to nine,” said Milam. “It’s going to be devastating.”

A study by the National Minority Quality Forum, first presented in June and recently published in the prestigious medical journal Diabetes Care, found not only decreased access for beneficiaries, but also increased hospitalizations and deaths in test markets.

Interestingly, only three of the suppliers for the new phase of the program were awarded contracts previously: Arriva Medical, Binson’s Home Health Care Centers and United States Medical Supply. The reason is a mystery, say providers.

“I would think if you served the contract well and found it to be profitable and bid again you would certainly rise the top,” said Dan Gooch, owner of Pal-Med in Columbia, S.C. “It leaves us to speculate they realized that they couldn’t stay profitable doing it or they choose to go in another direction.”

That could certainly be a possibility based on the new single payment amount for test strips, which dropped from $10.41 to $8.32 per box, a decrease of nearly 21%.

“I never thought I would see it go below $10.41,” said Gooch. “I don’t know who sharpened their pencil even more.”

The low pricing once again underscores the lack of transparency in the bid program, says Milam.

“I haven’t spoken to a single person—and I don’t know all of the winners—who bid lower than $8.32,” he said. “I don’t know how that’s the median price.”


That's the percentage of diabetic test strip claims that fail reviews and audits, quarter after quarter, year after year.  Doesn't that just make you wonder?