MedPAC makes case for ramping up bid program

Commission says CMS has authority to include more products, like vents, in program
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Monday, June 18, 2018

WASHINGTON – MedPAC’s June 2018 report to Congress recommends that CMS include more DMEPOS products in the competitive bidding program as a way to improve Medicare’s payment policies and reduce fraud and abuse.

“The CBP has successfully driven down the cost of DMEPOS products for the Medicare program and beneficiaries,” the report states. “Compared with payment rates in the year before the CBP, Medicare’s payment rates for some of the highest expenditure products have fallen by an average of roughly 50%.”

At the same time, MedPAC says expenditures for products not included in the program have continued to grow, making them good candidates for competitive bidding.

“By 2015, nearly half of all Medicare expenditures on DMEPOS products were for products excluded from the CBP,” the report states. “Medicare’s payment rates for the top 10 non-CBP products in 2015 were one-third higher, on average, than private-payer rates for comparable products, and some non-CBP products continue to generate high rates of improper payments and utilization growth and to exhibit patters of potential fraud and abuse.”

MedPAC points out that CMS has the authority to include some additional products in the program, including chest wall oscillation devices, ventilators and off-the-shelf orthotics.

The commission even describes products that CMS is statutorily prohibited from including in the program, like parenteral nutrition, as “likely good candidates…because multiple suppliers furnish the products, and Medicare’s payment rates appear to be substantially higher than private-payer rates.”

In the case of parenteral nutrition, MedPAC found that Medicare’s payment rate for the highest expenditure parenteral nutrition product was 24% higher compared with private-payer rates in 2015.

MedPAC also points out that CMS’s authority to include some additional products in the program, like ostomy, tracheostomy and urological supplies, is “unclear” but worth pursuing.