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Report (OEI-04-13-00682)

11-25-2014
Medicare Market Shares of Mail Order Diabetes Test Strips 3 Months After the Start of 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 (MIPPA) 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.

This is the third of three reports OIG has released in 2014 that determine the Medicare market shares of diabetes test strips for three different 3-month periods in 2013. One of these reports fulfilled OIG's reporting requirement to assist CMS in ensuring that winning bidders meet the MIPPA 50-percent requirement. The other two reports, including this report, were requested by CMS to provide additional market share data for different 3-month periods of service for informational purposes.

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 October to December 2013, 3 months after the start of the National Mail Order Program. Our sample of 1,210 claims was drawn from a population of approximately 1.03 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

Suppliers submitted claims for at least 41 types of mail order diabetes test strips for the 3-month period of October to December 2013. Two types of diabetes test strips accounted for approximately 44 percent of the Medicare mail order market share. Three types of diabetes test strips accounted for 58 percent of the Medicare mail order market share, and 10 types accounted for 91 percent. We are providing this information for CMS's use in evaluating the effect of the National Mail Order Program on the types of diabetes test strips available to beneficiaries. CMS may also find this information useful in assessing whether bidders have met the MIPPA 50 percent requirement.

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