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Medical Equipment Suppliers Participate In Medicare Competitive Bidding Program

Armen Hareyan's picture

Medical Equipment

CMS acting Deputy Administrator Herb Kuhn onWednesday said that the agency received more than 6,300 bids from suppliers ofdurable medical equipment during the first round of a Medicare competitivebidding program, The Hill reports. The first round includes10 metropolitan areas. The second round, announced earlier this month, will add70 areas, including New York, Los Angeles and Chicagoregions. The program is expected to go nationwide in 2009.

The program was mandated by the 2003 Medicare law. CMS anticipates that pricesset through competitive bidding will save billions of dollars for Medicare andits beneficiaries. Beneficiaries typically pay 20% of the price set by Medicarefor medical equipment.

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Acting CMS Administrator Kerry Weems in a statement said, "Competitivebidding means that Medicare beneficiaries will have access to these products atsubstantially lower costs."

Kuhn said that the number of bids shows the level of interest durable medical equipmentproviders have. However, some industry leaders say the suppliers areparticipating because they have no other choice, The Hill reports.

Mark Leahey, executive director of the Medical Device Manufacturers Association, said, "There's no optionhere. If you're not part of the process, you're foreclosed."

Walter Gorski, vice president of government affairs for the American Association for Homecare, said that Medicare represents 35%to 50% of revenue for a typical medical equipment company. He added that theprogram is "anything but competitive because, at the end of the day,you're going to be eliminating people from the market" (Young, TheHill, 1/18).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.