Survey: Bidding program really does limit access

CHICAGO - Beneficiaries in Round 1 competitive bid areas have limited access to the most widely used diabetes testing supplies, says the American Association of Diabetes Educators (AADE).

A survey by the association found that mail order contract suppliers, on average, offered only 38% of the product brands that are listed on www.medicare.gov. Of the nine brands identified by the Office of Inspector General in a 2010 report as the top mail order brands by market share, contractor suppliers offered, on average, only 1.44 of the brands, or 16%.

"We were getting all of these stories from our educators who were hearing about problems, or having their patients tell them they don't have a certain meter any more," said Martha Rinker, chief advocacy officer for the AADE. "When we talked to CMS about it, or any other party, they'd say it was just anecdotal. We thought this was the best way to get concrete information."

With an average reimbursement cut of 56% for mail order diabetes supplies, it's not all that surprising that many suppliers are offering lesser-known--and less expensive--brands. Dr. Peter Cramton, a vocal critic of the current competitive bidding program, predicted providers would cherry pick and switch patients to different brands to try and squeeze out a profit.

"It's in line with what I expected to see based on the current design of the program and the type of behavior it creates," said Tom Milam, a member of the Program Advisory and Oversight Committee (PAOC) and former CEO of mail-order diabetes supply firm AmMed Direct.

For Round 2, which expands the mail order diabetes bid to all 50 states and several U.S. territories, CMS has implemented changes it believes will prevent low-ball bids: Contract winners must provide, at minimum, 50% of all the different types of diabetes testing supplies on the market by brand names; and contract winners are prohibited from influencing or providing incentives to beneficiaries to switch their brands.

But unless CMS plans to police suppliers, stakeholders don't believe the provisions will work.

"It's easy to bid and give a low bid and say you're going to do something and not do it," said Rinker. "I think it's going to be up to us who work with the patient community to get some congressional interest in this to make CMS take an interest."