GAO sides with CMS on impact of bid program

‘However, some effects may take longer to appear, underscoring the importance of CMS’s continued monitoring activities’
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Tuesday, August 28, 2018

WASHINGTON – The average reduction in payment rates in non-competitive bidding areas for five DME items with the highest expenditures in 2016 was 46%, according to a new report from the Government Accountability Office.

In its review of the effects of reduced payment rates in non-bid areas, the GAO also found that: the number of suppliers furnishing rate-adjusted items in non-bid areas in 2016 decreased 8% compared to 2015; and beneficiary utilization of rate-adjusted items in non-bid areas in 2016 showed little change compared to 2015.

“GAO interviewed stakeholder groups that reported anecdotal examples of specific beneficiary access concerns they attributed to the rate adjustments, but stakeholders could not provide evidence to substantiate that the access issues were widespread,” the agency wrote in its report. “GAO’s findings are consistent with CMS’s monitoring results, which indicate that there were no widespread effects on beneficiary access in the year after the adjusted rates went into effect.”

The GAO continued: “However, some effects may take longer to appear, underscoring the importance of CMS’s continued monitoring activities.”

In a response to the report, the County for Quality Respiratory Care said it agrees that the impact of the reduced payment rates are not yet reflected in CMS’s monitoring activities.

“Since the report does not address the impacts of the policy on new patients with COPD, nor does it cover 2017 and beyond, it is essential for GAO to continue monitoring utilization rates,” said Dan Starck, chairman of the CQRC.

The CQRC also pointed out that the number of suppliers furnishing oxygen, specifically, in non-bid areas in 2016 decreased at a higher rate, 10%.

“This report validates what oxygen providers have been warning for years: that insufficient reimbursement rates make it harder to stay in business and serve Medicare patients who require supplemental oxygen and respiratory care to live independently,” Starck said. “No business can take on (these cuts) to reimbursement and expect to survive long.”

On Jan. 1, 2016, CMS used competitive bidding pricing information to adjust rates for 393 items in non-bid areas. The agency estimates these adjustments will save the Medicare program about $3.6 billion between fiscal years 2016-20.