A new program to cut Medicare spending could threaten access to medical products that doctors recommend and patients favor, according to early indicators that emerged last week.

Stakeholders watching the durable medical equipment market in Medicare's first nine competitive bidding areas warn that some winning contractors are making it difficult for beneficiaries to get their preferred brand of diabetic test strips. For example, some suppliers are requiring co-payments from Medicare customers unless they switch to the supplier's choice of brand; others are offering customers a free glucose meter to entice them to switch to the strips that the substitute meters use.

AdvaMed's 8 Concerns

At the April 5 meeting in Baltimore, AdvaMed Vice President Richard Price presented eight recommendations for CMS as the agency proceeds with its competitive bidding program:

Require that all winning bidders be bound by their actual bids.
Use an outside independent monitoring organization to check compliance with program rules.
Evaluate round one's impact on beneficiary health by analyzing actual clinical data, not just claims data.
Engage in continued education of patients and providers rather than one-time notification about the program.
Set accreditation standards unique to negative pressure wound therapy products.
Require winning bidders to supply specific brands of diabetic testing supplies requested by beneficiaries and recommended by health care providers.
Require winning suppliers to comply with the 50% market share threshold rule related to diabetic testing supplies on an ongoing basis, rather than just as a condition of a bid submission.
Extend grandfathering agreement options to suppliers of enteral nutrition to minimize disruptions in care.

The public comments arose during an April 5 meeting at CMS headquarters in Baltimore held to update the Program Advisory and Oversight Committee on the durable medical equipment competitive bidding program that was implemented at the start of this year. (See " Also see "DME Competitive Bidding: 32% Cost-Cutting Expected From Revived Program" - Medtech Insight, 5 July, 2010. " – "The Gray Sheet" July 5, 2010.)

Reports of restricted access to medical technology go to the heart of industry concerns over not just Medicare's competitive bidding program, but also other cost-cutting measures, such as accountable care organizations and value-based purchasing. (See " Also see "Device Groups Voice Key Concerns With Accountable Care Organizations" - Medtech Insight, 11 October, 2010. " – "The Gray Sheet" Oct. 11, 2010.)

CMS Reports Smooth Start

CMS program officials say they have not noticed significant health impacts linked to the program, based on their own monitoring, but they encouraged continued feedback.

"Our number one mission here at CMS is to make sure our beneficiaries get the care they need," Lawrence Wilson, director of the CMS Chronic Care Policy Group, told meeting attendees.

CMS senior technical advisor Martha Kuespert reported that although the agency added significant resources in call center and hotline support in advance of the program's rollout, the level of beneficiary response was not nearly as high as anticipated.

"So far, from what we've seen," she said, "the implementation has been very smooth, very quiet."

Kuespert told the advisory committee that CMS is actively monitoring contractors and subcontractors participating in the competitive bidding program to make sure they comply with the rules.

"We've been doing secret shopping" through calls to mail-order diabetic testing supply contractors, she explained, investigating whether they adhere to Medicare's non-discrimination product policy, which seeks to ensure that a variety of brands are available to beneficiaries.

Possible Products For Round Two

In round two, the CMS program will expand to 91 competitive bidding areas and include up to 20 durable medical equipment and orthotics categories. Among the new product categories under consideration are:

Negative pressure wound therapy pumps and supplies
Off-the-shelf orthotics
Ventilators
Nebulizers
Blood glucose monitors
Manual wheelchairs

However, some industry stakeholders who spoke at the meeting said they have done secret shopping of their own and uncovered cases where Medicare customers are not given access to some of the top brands of diabetic testing strips.

Jonathan Blum, CMS deputy administrator and director of the Center for Medicare, said that in monitoring the program's roll-out, the agency is focusing first and foremost on beneficiary impact, such as whether they continue to have access to the supplies they need.

He added that any stakeholder with concerns over the handling of calls to the national toll-free Medicare hotline could forward the specifics to CMS officials overseeing the competitive bidding program, who would then be able to go back and access a recording of the phone call by time and date.

Blum acknowledged, too, that there are likely more complaints with the competitive bidding program than those finding their way directly to the Medicare hotline.

"Our actions are only as good as the data that CMS receives," Blum said.

Clinical Outcomes Studied

Among the data that CMS looks at in monitoring the impact of the competitive bidding program are Medicare claims for patients who use or are considered candidates to use the types of products in the competitive bidding program. CMS can examine real-time claims data for clinical outcomes in patients in the competitive bidding areas against their comparators in cities with similar demographic characteristics.

For example, beneficiaries in the competitive bidding area of Charlotte, N.C., are compared to those in Virginia Beach, Va., which is not yet included in the program, explained Jeffrey Kelman, chief medical officer for the Medicare Program Advisory and Oversight Committee.

In its examination of Medicare claims data for the first three months of 2011, CMS found that patient clinical outcomes in competitive bidding areas closely matched those in comparator cities.

Kelman said he welcomes suggestions for metrics to measure quality-of-life issues, which are hard to monitor through claims data alone.

Industry executives and durable medical equipment suppliers attending the meeting argued that three months worth of claims data cannot give a proper glimpse into potential problems with the competitive bidding program.

Stakeholders want CMS to assess data over a longer period of time and not rush into the next round of the competitive bidding program, which is set to expand to 91 markets and could add a number of new product categories to the mix.

Tentative Timeline For Round Two Bid

CMS officials shared this updated timeline for the next round of bidding in its durable medical equipment competitive bidding program:

Summer 2011: Announce round two product categories
Fall 2011: Announce bidding schedule; begin bidder registration and education
Winter 2012: Open bidding
Spring 2012: Close bidding; begin bid evaluation
Fall 2012: End bid evaluation; begin contracting process
Spring 2013: Announce contract suppliers; begin education programs for contractors, beneficiaries, referral agents and general suppliers
Summer 2013: Implement round two program and national mail order program contracts and pricing

CMS released a detailed, though still tentative, timeline for the round two bid, under which bidding is slated to begin by the end of this year. Implementation would not begin until summer of 2013.

The next round would also take the bidding program for mail-order diabetic testing supplies nationwide. (See " Also see "Industry Urges Delay In Nationwide Bidding For Mail-Order Diabetes Supplies" - Medtech Insight, 6 September, 2010. " – "The Gray Sheet" Sept. 6, 2010.)

Industry wants to place stronger protections on Medicare beneficiary access to their preferred brand of diabetic test strips so that patients with diabetes would not be limited to using glucose meters that they are unfamiliar with and that do not have the features to which they have grown accustomed.

One speaker told the advisory committee he has heard anecdotal reports that some arthritic patients find it hard to adapt to smaller buttons on substitute glucose monitors, which could lead them to waste test strips or even stop testing altogether.

Device makers want CMS to make sure beneficiaries understand that even in competitive bidding markets, they can continue to purchase diabetic testing supplies at retail rather than through direct mail if they prefer.

At last week's CMS meeting, University of Maryland economist Peter Cramton criticized the auction methods used in the competitive bidding program, calling them "fatally flawed." Cramton said CMS should engage auction experts and stakeholders in an effort to redesign the process and find ways to test the new auction theory before putting it into practice.

If the Medicare agency does consider fundamental changes to the program's methodology, Blum said, CMS would open a comment and review process.

The home medical equipment industry continues to push for a repeal of the competitive bidding program and has pockets of support on Capitol Hill. In March, Reps. Jason Altmire, D-Pa., and Glenn Thompson, R-Pa., introduced the Fairness in Medicare Bidding Act, HR 1041, to repeal the program. The bill reportedly had 74 cosponsors as of April 7.

By Monica Hogan

Access To Diabetic Test Strips Jeopardized In CMS Competitive Bidding Areas

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