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GAO: CMS Bidding Program Cuts down on DME Fraud

A new report from the GAO found that CMS’ competitive bidding program for durable medical equipment (DME) may have unexpectedly cut down on device fraud and overutilization. The program was initially launched in 2007 to ensure that Medicare paid for medical supplies and devices at reasonable market rates, which was a failing of the old fee schedule reimbursement system. The most recent round of the program launched in 2013 has so far saved Medicare $3.6 billion. However, specific equipment and supply categories using competitive bidding have also witnessed a severe drop in the number of beneficiaries served.

Investigators concluded that the bidding process made fraud and unnecessary utilization less profitable for suppliers and providers by reducing what Medicare pays for DME. They also found that despite the decline, few beneficiaries reported problems accessing necessary DME and there was no corresponding increase among health measures suggesting a lack of care. So far, the bidding program seems to be an unqualified success.

Top 5 Durable Medical Equipment Categories by Medicare Payment, 2013

DME Type Total Payments Total# of Services Total# of Claims
Other DME $2,147.0 89,149,132 44,246,013
Oxygen and Supplies $1,328.3 15,742,574 15,318,883
Other Drugs $952.1 284,172,433 7,347,756
Prosthetic/Orthotic devices $600.1 135,701,812 4,941,270
Drugs Administered Through DME $566.8 626,827,652 4,651,110

Source: Definitive Healthcare Data

Definitive Healthcare has the most up-to-date, comprehensive and integrated data on over 7,700 hospitals, 1.4 million physicians, and numerous other healthcare providers. Users have access to comprehensive analytics tools to discover market intelligence for medical procedures, prescription drugs, and DME.

October 19, 2016
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