Competitive bidding program continues to maintain access and quality while helping to save Medicare millions

CMS News
September 8, 2016
Contact: CMS Media Relations
(202) 690-6145 | CMS Media Inquiries

The Centers for Medicare & Medicaid Services (CMS) today announced the new single payment amounts and began sending contract offers to successful bidders for Medicare’s Round 1 2017 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. These new payment amounts and contracts go into effect on January 1, 2017. This program has been an essential tool to help Medicare set appropriate payment rates for DMEPOS items and save money for beneficiaries and taxpayers while ensuring access to quality items.
Prior to the DMEPOS Competitive Bidding Program, Medicare paid for these DMEPOS items using a fee schedule that is generally based on historic supplier charges from the 1980s. Numerous studies from the Department of Health and Human Services Office of Inspector General and the Government Accountability Office have shown these fee schedule prices to be excessive, and taxpayers and Medicare beneficiaries bear the burden of these excessive payments.
Under the Competitive Bidding Program, DMEPOS suppliers compete to become Medicare contract suppliers by submitting bids to furnish certain items in competitive bidding areas. Since implementation of the DMEPOS Competitive Bidding Program on January 1, 2011, CMS has saved approximately $220 million per year in the nine Round 1 metropolitan statistical areas (MSAs) due to competitive bidding and other CMS fraud, waste, and abuse initiatives. Health monitoring data indicate that the program implementation is going smoothly with few inquiries or complaints and no negative beneficiary health outcomes.
The Round 1 Recompete contract period expires on December 31, 2016. Round 1 2017 contracts will become effective on January 1, 2017 through December 31, 2018.

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