Home Care Trade Groups Seek Delay for DME Bidding Program

A trade group for in-home care equipment suppliers wants to delay implementation of the Centers for Medicare & Medicaid Services’ (CMS) competitive bidding program for durable medical equipment (DME) in the new areas where Round 2 contracts have recently been awarding, citing access issues.

Federal regulator are expecting DME prices to keep dropping with the increased scope of Medicare’s competitive bidding program, but a trade group representing suppliers says the program will limit beneficiaries’ access to necessary supplies and will also hurt the industry’s bottom line, says a recent American Medical News article.

The DME industry “believe[s] there will be unneeded hardship on beneficiaries and home care providers as Round 2 gets under way on July 1,” Tyler Wilson, president of the American Association for Homecare, told AmedNews.


CMS announced the 799 winners of the program’s Round 2 contracts in April. The contracts will go into effect starting July 1, at which point Medicare beneficiaries in 91 communities will only be able to get equipment such as wheelchairs, scooters, and oxygen from the chosen contractors. With the new contractors, there will be bout 1,150 DME suppliers participating in the program by July according to AmedNews. 

The goal of the competitive bidding program is to weed out fraudulent suppliers and reduce the cost of equipment to beneficiaries. It produced more than $200 million in savings in its first year, according to CMS, which estimates Medicare Part B will save nearly $26 billion through the program in the next 10 years. 

However, most of the contract payment rates are “well below the cost of providing the equipment,” Wilson says in the article.


“As home care businesses struggle under unsustainable payment rates, their ability to meet the needs of beneficiaries will be undermined,” he told AmedNews. 

Additionally, beneficiaries may be adversely affected if they have to switch from their regular supplier, if the company hasn’t been awarded a CMS contract through the competitive bidding program. 

The Department of Health and Human Services Office of Inspector General (OIG) has agreed to investigate the program at the request of the American Association for Homecare, which is calling for CMS to delay the program’s implementation in the 91 new regions until lawmakers have the opportunity to investigate results from Round 1 bidding areas and reported problems with the Round 2 bidding process, according to the article. 

Many DME suppliers and manufacturers are concerned about provisions in the Obama Administration’s fiscal year 2014 budget proposal that could affect payment rates for equipment under the Medicaid program by basing them on what Medicare pays—estimated to save more than $4.5 billion in a 10-year timeframe.

CMS denies the program would impede beneficiaries’ access to DME. 

“Our extensive monitoring in round 1 showed that competitive bidding reduced spending without jeopardizing access to medical equipment and supplies,” said Jonathan Blum, deputy CMS administrator and director of the agency’s Center for Medicare, in a statement. “Medicare contract suppliers signed contracts that included protections to ensure that they will furnish beneficiaries with necessary equipment and quality customer service.”

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Written by Alyssa Gerace