CMS Cuts PAP Reimbursement in Nine Competitive Bidding Areas

[Slinky]

From Sleep Review e-magazine:

CMS Cuts CPAP Reimbursement in Nine Competitive Bidding Areas

CMS announced last week that starting January 1, 2011, its competitive bidding program will cut reimbursement for continuous positive airway pressure (CPAP) devices by, on average, 34%, in nine cities. The cuts mark the first round of Medicare’s competitive bidding program, which will be used to determine the price Medicare pays for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

The program replaces Medicare’s existing fee schedule amounts with market-based prices.

The first round of cuts will go into effect for beneficiaries in Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh, and Riverside.

Beneficiaries living in the nine first round communities who use certain medical equipment and supplies may have to choose a new Medicare contract supplier if they want to have Medicare help pay for an item. According to CMS, Medicare will work with local partners and health care providers to inform beneficiaries about the changes.

Currently, CMS is mailing contract offers to winning bidders and expects to complete the contracting process in time to announce the contract suppliers in September. Small suppliers—those with gross revenues of $3.5 million or less—make up about 48% of the suppliers that will be offered contracts.

The competition for round two of the competitive bidding program, which will expand the program to an additional 70 metropolitan statistical areas, will begin in 2011. Additional areas of the country will be added after 2011.

More information on single payment amounts for CPAP can be found here.

Comment on this article at Sleep Review’s Facebook page.

You think it was hard to convince your local DME provider to supply you w/a fully data capable CPAP instead of that entry level, compliance data only CPAP? Or an APAP instead of a CPAP? Are you going to be happy w/less choice of local DME providers and/or having Apria and Lincare as your only local DME provider choices? This MAY help level the playing field for Fisher & Paykel, DeVilbiss, Sandman, Breas, Evo ...... ARE Resmed and Respironics pricing themselves outta the market just as they come up w/newer and hopefully better therapy options? Wha'choo thimk?

[DreamStalker]

I think from the DME side, it will be a race to the bottom to see who can provide the cheapest CPAP hardware. The reason being is that they will want to get the Medicare dollars so they will stock up on the cheapest units. Meanwhile, the insurance companies will want to cut costs too and only pay for bottom of the line machines.

Since the vast majority of OSA patients are ignorant about their treatment and remain so unless they find their way to this forum, the manufacturers will follow DMEs, MEdicare, and insurace goals and drop innovation in preferrence of profits and market share to compete in the race to the bottom.

[jdm2857]

Maybe this helps to explain the existence of the otherwise inexplicable ResMed S8 Escape II Auto. The first (I think) Auto without efficacy data.

Sure doesn't sound good.

[6PtStar]

I see a real market for some cheap leaf blowers in the near future. Shame!!

Jerry

[c[a[queen1]

The manufacturers will have to drop their prices to stay in the game. At this price...many more DME's will be cloding their doors.

[akcpapguy]

This will hurt the Mom and Pop DME's the most. One of my best friends owns a small Respiratory only DME in MN, a few months back he and I compared our costs of CPAP's. His cost per System One Pro was 50$ and 115$ more for an Auto. Now the DME I work for is not a major DME chain either but we are part of a major health company, i can only imagine how much more his cost per CPAP is compared to one of the major players like Apria or Lincare. If this comes to his area he will likely go out of the CPAP business and only work with Oxygen.

[Wulfman]

Echoing Slinky's thoughts......
I think it's ironic that this is occurring after the major manufacturers have come out with their "new and improved" models.

Does anybody know how they happened to pick those nine areas? (for their first round of bidding)
What happens in the second round and where will they be?

If they wouldn't keep changing the boxes every time they come out with a new generation of machine, their manufacturing costs would be alot lower. Also, if they would quit making so many different models, too. (although some seem to be narrowing them down.....finally)

It'll be interesting..........


Den

[roster]

It is past time to start selling them at WalMart and Best Buy OTC.

[Goofproof]

Comment on this article at Sleep Review’s Facebook page. [/quote]

You think it was hard to convince your local DME provider to supply you w/a fully data capable CPAP instead of that entry level, compliance data only CPAP? Or an APAP instead of a CPAP? Are you going to be happy w/less choice of local DME providers and/or having Apria and Lincare as your only local DME provider choices? This MAY help level the playing field for Fisher & Paykel, DeVilbiss, Sandman, Breas, Evo ...... ARE Resmed and Respironics pricing themselves outta the market just as they come up w/newer and hopefully better therapy options? Wha'choo thimk?[/quote]

I think getting quotes would require spec's for the product. If they don't spec full data machines the problem will lie with Medicare, naturally the DME is going to try to provide the one he can make the most profit on. If I was in charge bidding U.S. made would be built into the mix too. Jim

[So Well]

So where are all those members that argued here for socialized medicine????

What do you think of this?

Where do you think we are headed with Obamacareless?

America can no longer afford decent Medicare, much less Obamacare.

You put your faith in a big Federal government to take care of you. The writing is on the wall. Obamacare will lower the level of medical care. Innovation in the medical field will decline. America will become second-rate.

You better plan on making arrangements for your own medical care. But where will we turn? There are going to be a large number of suppliers, hospitals, clinics, doctors and other medical professionals exiting the market. Doctors are going to retire earlier at an alarming rate. We will be crowding around a smaller "medical trough" and waiting in line.

Growth of a big powerful centralized government is very bad for my beloved USA.

[megawill]

So where are all those members that argued here for socialized medicine????

What do you think of this?

Where do you think we are headed with Obamacareless?

America can no longer afford decent Medicare, much less Obamacare.

You put your faith in a big Federal government to take care of you. The writing is on the wall. Obamacare will lower the level of medical care. Innovation in the medical field will decline. America will become second-rate.

You better plan on making arrangements for your own medical care. But where will we turn? There are going to be a large number of suppliers, hospitals, clinics, doctors and other medical professionals exiting the market. Doctors are going to retire earlier at an alarming rate. We will be crowding around a smaller "medical trough" and waiting in line.

Growth of a big powerful centralized government is very bad for my beloved USA.

hyperbole....

[So Well]

hyperbole....

So I am exaggerating?

What do you have to say? Nothing?

Can you defend that which you support and vote for?

Do you have more than one word to defend this mess you voted in for us? This mess that we do not have the ability to pay for?

[DreamStalker]

So where are all those members that argued here for socialized medicine????

What do you think of this?

Where do you think we are headed with Obamacareless?

America can no longer afford decent Medicare, much less Obamacare.

You put your faith in a big Federal government to take care of you. The writing is on the wall. Obamacare will lower the level of medical care. Innovation in the medical field will decline. America will become second-rate.

You better plan on making arrangements for your own medical care. But where will we turn? There are going to be a large number of suppliers, hospitals, clinics, doctors and other medical professionals exiting the market. Doctors are going to retire earlier at an alarming rate. We will be crowding around a smaller "medical trough" and waiting in line.

Growth of a big powerful centralized government is very bad for my beloved USA.

Go back to sleep ... you're still dreaming.

[unadog]

We all know that the DME prices are outrageous compared to true market rates.

This is inevitable. You can't maintain excess margins in the current marketplace, where we have options like cpap.com This is why Resmed has been trying to artificially prop up their margins. Also why there was that lawsuit against Resmed "price maintenance" by that potential VA supplier a few months ago.

The incremental MSRP for a Respironics S1 Pro over the Plus is $60. Hopefully clients that want data can pay the incremental and get data.

[Slinky]

Actually, that lawsuit was not directly against Resmed. Resmed (and Respironics) were drawn in as secondaries simply because they had deeper pockets. There was some alleged racial discrimination involved, one distributor against another or some such. I just can't remember it very well. I was immediately interested when the first news we saw indicated Resmed was being sued so dug into the matter. But that was quite a while ago now and my memory, she's not so good any more!!!!

It was rather like a case of a son shooting his father and then suing the gun manufacturer because he didn't know the gun was loaded. So WHY did he point it at his father?? WHY would you point a gun at ANYONE UNLESS you intended to shoot them??