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Report (OEI-04-13-00681)

06-20-2014
Medicare Market Shares of Mail Order Diabetes Test Strips Immediately Prior to the National Mail Order Program

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Summary

WHY WE DID THIS STUDY

Medicare covers diabetes test strips provided by mail order suppliers and local pharmacies or supplier storefronts. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires CMS to phase in, with several rounds of bidding, a Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Under this program, suppliers compete to become Medicare contract suppliers for selected DMEPOS items. The payment amounts resulting from the competition replace the Medicare fee-schedule amounts for these items.

CMS asked OIG to conduct a study to determine market shares of diabetes test strips for the 3 month period immediately prior to the start of a national program for mail order diabetes testing supplies on July 1, 2013. CMS may choose to use the results of this report for program analysis purposes and to evaluate the effect of the Competitive Bidding Program on brand choice.

HOW WE DID THIS STUDY

We determined the Medicare market shares for diabetes test strip types associated with a random sample of Medicare claims for the 3-month period of April to June 2013. Our sample of 1,210 claims was drawn from a population of approximately 1.36 million claims for mail order diabetes test strips provided to beneficiaries during this period. To estimate the Medicare market shares, we surveyed suppliers and projected our sample data to the population of mail order diabetes test strips.

WHAT WE CONCLUDED

One hundred fifty-two suppliers submitted at least 62 types of mail order diabetes test strips for the 3 month period of April to June 2013. Two types of diabetes test strips accounted for approximately 34 percent of the Medicare mail order market share. Four types of diabetes test strips accounted for 51 percent of the Medicare mail order market share, and 10 types accounted for 75 percent. CMS may choose to use the results of this report for program analysis purposes and to evaluate the effect of the Competitive Bidding Program on brand choice.

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