A pilot program that has been going on for a year has resulted in $200 million in savings for Medicare. It started in nine cities, and will be expanded soon. The experiment showed that competitive bidding for personal medical equipment led to savings for Medicare. This is good news for consumers.
This experimental program was launched in nine metropolitan areas. Those areas were: Charlotte-Gastonia-Concord, (North Carolina and South Carolina), Cincinnati-Middletown (Ohio, Kentucky and Indiana), Cleveland-Elyria-Mentor (Ohio), Dallas-Fort Worth-Arlington (Texas), Kansas City (Missouri and Kansas), Miami-Fort Lauderdale- Pompano Beach and Orlando (Florida), Pittsburgh (Pennsylvania), and Riverside-San Bernadino- Ontario (California).
The purpose of the program was to reduce the expenses incurred in the Medicare program by reducing the amount of fraud that was occurring. Specifically, the program looked at nine categories of medical equipment: oxygen supplies, standard power wheelchairs, complex power wheelchairs, mail-order diabetic supplies, tube-feeding supplies and equipment, sleep apnea machine and equipment, hospital beds, walkers, and certain types of mattresses.
The program instituted competitive bidding among the companies who sell and supply those types of medical equipment. A limited number of companies were approved in each of the nine areas. Previous to this program, Medicare was struggling to manage medical equipment costs.
According to officials, this was because Medicare was being charged more for it than were private insurers. The other problem was that unscrupulous suppliers were able to order expensive but unnecessary products for people who were using Medicare.
The results of the pilot program were interesting. It produced $200 million in savings for Medicare. The areas that were in the program were compared with areas that were not. Data was compared regarding emergency room visits and nursing home admissions. There were no significant differences between the two groups.
The Medicare consumer hotline received 127,466 calls from beneficiaries about the competitive bidding program in 2011. This equates to less than 1% of the total calls received. There was a sharp decrease in the quantities of supplies ordered for diabetes testing and sleep apnea machines. When questioned, beneficiaries said that they had more than enough supplies on hand, (usually several months worth). This indicates that they were receiving more supplies than they actually needed before the pilot program started.
The American Association for Homecare has complaints about this program. It has said that Medicare’s competitive bidding model could lead to shortages in supplies, or could force beneficiaries to use cut-rate equipment. So far, there are no facts to back up that assumption. The program has been very successful, and has not harmed the care that is received by Medicare beneficiaries. It will soon be expanded to more cities.
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