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Round 2 Competitive Bidding for Enteral Nutrition: Continued Access for Vast Majority of Beneficiaries


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 letter to OIG, Members of Congress expressed concerns about the program's effect on access to DME and requested that OIG study this issue.


We used Medicare claims to identify a population of beneficiaries for whom Medicare paid claims before Round 2 of the Competitive Bidding Program started, but not afterward. This population included beneficiaries for whom Medicare paid claims for enteral nutrition supplies. We then drew a sample of beneficiaries for whom Medicare payments for supplies stopped after Round 2 began. We also analyzed Medicare claims data from 2012 to determine the percentage of beneficiaries receiving enteral nutrition supplies for whom Medicare payments stopped in the last full year prior to Round 2 of the program. We then surveyed the physicians who had ordered the enteral nutrition supplies for these beneficiaries. In cases in which physicians reported a continued beneficiary need, we surveyed the beneficiaries to learn about their experiences after Round 2 began.


The vast majority of beneficiaries who in 2013 started receiving enteral nutrition supplies appeared to have continued access to them after Round 2 of the Competitive Bidding Program for DME began. Among beneficiaries in Round 2 competitive bidding areas (CBAs) who received enteral nutrition supplies before bidding began, 91 percent continued to do so after Round 2 began. This rate is only slightly lower than the 94-percent continuation rate in non-CBAs and the 95-percent continuation rate in 2012, the year before Round 2 took effect. Our surveys of physicians and beneficiaries provided some anecdotal context for a sample of beneficiaries for whom payments for supplies stopped. For example, most physicians from Round 2 CBAs told us that beneficiaries without continued payments still had a prescribed need for the nutrients or supplies, and three of the six responding beneficiaries reported continuing to receive them even though Medicare claims stopped.


Round 2 of the Competitive Bidding Program did not appear to have disrupted beneficiary access to enteral nutrition supplies for the vast majority of beneficiaries. However, we did find that the percentage of beneficiaries for whom Medicare payments did not continue was slightly higher in Round 2 CBAs than in non CBAs. This difference may or may not indicate disruptions in receiving needed supplies. For example, this difference may indicate that the program reduced the provision of unnecessary enteral nutrition supplies, as CMS determined to be the case with Round 1 of the program. In its comments on our report, CMS stated that it would take our findings and methods into account as it continues to review the Competitive Bidding Program.