Toxic mix


I blogged last week about the significant drop in the number of allowed beneficiaries for some of the most popular DMEPOS products starting in January of 2016.

I speculated that the nosedive was due to CMS’s roll out of competitive bidding to non-bid areas and its implementation of the first of two reimbursement cuts that each amount to about 25%.

Quite a bit of conversation on twitter ensued.

A number of providers (and Managing Editor Theresa Flaherty) speculated that the nosedive also had to do with deductibles.

Per provider Chris Rice’s suggestion, I dug back in to see if the same drop that we’re seeing from December 2015 to January 2016 happened from December 2014 to January 2015. And sure enough, it did.

But not quite as much.

Using oxygen concentrators as an example, I found that the drop in the number of allowed bennies was 17.5% from December 2014 to January 2015. From December 2015 to January 2016, it was 24%.

So I definitely think this is a toxic mix of competitive bidding and deductibles sending utilization spiraling downward.

The number of allowed bennies for oxygen concentrators from January 2015 to February 2015 did bounce back a bit, from 210,735 to 223, 357, but it fell well short of December 2014, when it was 247,618.

What happened in February 2016? Stay tuned.