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Round 2 Competitive Bidding for CPAP/RAD: Disrupted Access Unlikely for Devices, Inconclusive for Supplies

WHY WE DID THIS STUDY

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established the Competitive Bidding Program for durable medical equipment (DME). The program replaces a fee schedule with a competitive bidding process to set Medicare reimbursement amounts in certain areas. In a 2014 letter to OIG, Members of Congress expressed concerns about the program's effect on access to DME and requested that OIG study this issue.

HOW WE DID THIS STUDY

We used Medicare claims to identify two populations of beneficiaries for whom Medicare paid claims before Round 2 of the Competitive Bidding Program started on July 1, 2013, but not afterward. The first population included those with paid claims for CPAP/RAD devices (i.e., continuous positive airway pressure (CPAP) devices or respiratory assist devices (RADs)); the second, those with paid claims for CPAP/RAD supplies. We then drew two samples of beneficiaries for whom Medicare payments stopped after Round 2 began-one for whom device payments stopped and one for whom supplies payments stopped. We then surveyed the physicians who had ordered devices or supplies for these beneficiaries. In cases in which physicians reported a continued beneficiary need, we surveyed those beneficiaries to learn about their experiences after Round 2 began.

WHAT WE FOUND

Nearly all beneficiaries who in 2013 started using CPAP/RAD devices appeared to have continued access to them after Round 2 of the Competitive Bidding Program for DME began. Our surveys provided some anecdotal context for a sample of beneficiaries for whom payments for devices stopped. For example, physicians told us that the beneficiaries still needed CPAP/RAD devices, and beneficiaries generally reported continuing to use them. For CPAP/RAD supplies, we found that Medicare payments stopped for 46 percent of beneficiaries in Round 2 competitive bidding areas compared to 33 percent in areas that were not competitive bidding areas. About half of the beneficiaries we surveyed reported needing supplies, and nearly all of these beneficiaries reported getting needed supplies.

WHAT WE CONCLUDE

Round 2 of the Competitive Bidding Program is unlikely to have disrupted beneficiary access to CPAP/RAD devices. Our finding is consistent with CMS's conclusion that the program is not compromising beneficiary health outcomes. Our analysis is inconclusive regarding whether the program disrupted beneficiary access to CPAP/RAD supplies. We saw a bigger decline in claims for supplies in Round 2 competitive bidding areas than in areas that were not competitive bidding areas. The decline may or may not indicate disruptions in receiving needed supplies. For example, the decline may indicate that the program reduced the provision of unnecessary supplies, as CMS determined to be the case with Round 1 of the program.

Copies can also be obtained by contacting the Office of Public Affairs at Public.Affairs@oig.hhs.gov.

Download the complete report.

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201