Q: What is the new program beginning in July in certain areas across the nation where Medicare beneficiaries will pay less out of pocket for certain medical equipment and supplies if they purchase them through Medicare contract suppliers?
A: From the Centers for Medicare and Medicaid Services (CMS):
For years, Medicare and its beneficiaries have been paying too much for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). To reduce costs and the fraud resulting from excessive prices, CMS introduced a competitive bidding program in nine areas of the country in 2011. People with Original Medicare who live in Competitive Bidding Areas – or CBAs – will pay less for certain DMEPOS items and services such as wheelchairs, oxygen, mail order diabetic supplies, and more. Competitive bidding for DMEPOS is proven to save money for taxpayers and people with Medicare while maintaining access to quality DMEPOS items.
The program has already been hugely successful, reducing money spent for equipment included in the program by over 42 percent in its first year of operation. Now the program’s benefits are coming to you, and there is some important information you need to know. Expansion of the program began on July 1, and extends it to 91 new areas across the country, including Wichita, Kansas, St. Louis, Missouri, Omaha, Nebraska, Council Bluffs, Iowa and surrounding counties in these areas. People with Medicare in these areas will save an average of 43 to 47 percent on certain DMEPOS items.
Medicare is also implementing a nationalmail-order program for diabetic testing supplies which began July 1, and beneficiaries nationwide will save an average of 72 percent on these supplies.
How the Program Works:
Medicare generally pays 80 percent of the costs for durable medical equipment, prosthetics, orthotics, and supplies used in the home under Medicare Part B. The person with Medicare pays the remaining 20 percent. Under this program, suppliers of these types of supplies submitted bids for certain medical equipment and supplies that must be lower than what Medicare pays for these items currently. Medicare used these bids to set the amount it will pay for the competitively bid medical equipment and supplies and qualified, accredited suppliers with winning bids were chosen as Medicare contract suppliers.
The good news is that since Medicare’s payment amount to suppliers will be less, people with Medicare who use the equipment and supplies under the competitive bid program will have a lower co-payment too.
If you have Original Medicare, and your permanent residence is in a ZIP code that is part of a Competitive Bid Area, CBA, and you use items in one of the program categories, you generally must use a Medicare contract supplier to have Medicare help pay for the item. If you currently receive oxygen/oxygen equipment or rent certain other items from a non-contract supplier, you may be able to continue renting these items from your current supplier when the program takes effect, if the supplier decides to become a grandfathered supplier. All contract suppliers must comply with Medicare enrollment rules, be accredited, meet applicable licensing requirements, meet financial standards and meet stringent quality standards to ensure good customer service and high quality items. Ninety percent of contract suppliers are already established in the competitive bidding area, the product category, or both. This means Medicare beneficiaries will be getting the same high quality products and services but at lower prices. And, small suppliers – those with gross revenues of $3.5 million per year or less – make up about 63 percent of the contract suppliers in the new markets.
The expanded program is expected to save Medicare more than $25 billion in the next ten years, and people with Medicare are expected to save $17 billion more in reduced out-of-pocket costs and premium payments.
For a list of Medicare contract suppliers in your area, visit www.medicare.gov/supplier/home.asp or by calling 1-800-MEDICARE (TTY users should call 1-877-486-2048).