GAO analyzes bid program's impact

WASHINGTON - The number of both beneficiaries and DME suppliers declined in Round 1 competitive bidding program areas in 2012, according to a new report issued yesterday by the Government Accountability Office (GAO).

To conduct its study, the GAO compared Medicare claims data from 2011 and 2012 with 2010 for beneficiaries; and compared claims data for 2012 with 2010 for contract and non-contract suppliers. For monitoring purposes, CMS had selected nine “comparator” areas that were demographically similar to the nine Round 1 competitive bidding areas.

Findings

• The GAO found that the number of beneficiaries in the CBAs decreased more in the bid areas compared to the comparator areas. For example, the number of beneficiaries receiving oxygen supplies decreased by about 22% in bid areas vs. 16% in the comparator areas. CMS attributes the decrease to a reduction in inappropriate use.

However, the GAO did state that the termination of The Scooter Store's contract in 2013 could create access issues for beneficiaries seeking repairs in those CBAs.

• The GAO also found that, in general, a small number of contract suppliers had a large portion of market share in the nine CBAs and that the top four contract suppliers generally accounted for a larger proportion of the market, although the top four contract suppliers were not the same in every CBA.

• The total number of DME suppliers and Medicare allowed charges decreased more in the nine bid areas. For example, the number of suppliers with allowed charges of $2,500 or more decreased, on average, 27% in CBAs vs. 5% in the comparator areas.

In conclusion the GAO stated the competitive bidding program does not appear to have impacted beneficiary access to covered items. However, states the report, CMS must continue monitoring the effects of the expansion of the program to 100 areas in July 2013 and of the national mail-order program for diabetes supplies.

According to CMS, the program saved estimated $400 million in its first two years.