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Mail-order market for diabetes on precipice of disaster

Mail-order market for diabetes on precipice of disaster As Arriva prepares to close, stakeholders expect increased pressure on an already shaky infrastructure

CORAL SPRINGS, Fla. - With Arriva Medical, the largest mail-order supplier of diabetes testing supplies, closing its doors at the end of the year, industry stakeholders predict chaos.

Arriva serviced 450,000 Medicare beneficiaries in 2016, according to the latest information in the HME Databank.

“This is a disaster,” said Tom Milam, an industry consultant. “I think CMS has to find a way to react to this, but there's no other firm out there that has the infrastructure or capacity to service but a small fraction of these beneficiaries.”

Earlier this year, Arriva Medical lost an appeal seeking to reinstate its Medicare billing privileges. CMS revoked those privileges in 2016, alleging the provider submitted 211 claims for deceased patients between April 15, 2016, and April 25, 2016.

Also closing, according to an article in the Sun Sentinel, is Boca Raton-based American Medical Supplies, which serviced 33,000 beneficiaries in 2016, according to the HME Databank. Both companies are owned by Alere, which was recently acquired by Abbott Laboratories.

That leaves just nine mail-order companies to serve all Medicare beneficiaries, say stakeholders.

“There were a lot of concerns in that sector to begin with,” said Tom Ryan, president and CEO of AAHomecare. “The infrastructure of the traditional DMEPOS suppliers is crumbling before us and all these closures put a strain on the infrastructure. It all comes back to access, access, access.”

Fueling those access problems: low reimbursement rates, which have been reduced 71% to a low of $8.32 for a box of test strips since the mail-order program first kicked off in 2011.

“I have spoken to some of the skeletons of providers who have been excluded from the program and they have said at the current reimbursement there's no way they'd do it,” said Milam.

While CMS has long touted the program's savings, others, including the American Association of Diabetes Educators, the American Association of Clinical Endocrinologists and the Diabetes Access to Care Coalition, say the low reimbursement rates have meant beneficiaries can't access their preferred brands and must use inferior brands—all of which can lead to poor health outcomes and an increase in death and hospitalizations.

“All the patient groups have asked for the program to be suspended,” said Nancy Johnson, a former U.S. Congresswoman and retired policy analyst with deep knowledge of the competitive bidding program. “The bidding process was clearly deficient: when you reduce payments by 71%, it's probably overkill.”


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