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Medicare Market Shares of Non-Mail Order Diabetes Test Strips From April Through June 2018

Issued on  | Posted on  | Report number: OEI-04-18-00441

Report Materials

WHY WE DID THIS STUDY

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) prohibits CMS from awarding a Competitive Bidding Program contract to a supplier of diabetes test strips if the supplier's bid does not cover at least 50 percent, by volume, of the types of diabetes test strips provided to Medicare beneficiaries. This is known as the "50-percent rule." MIPPA requires OIG to determine the market shares of the types of diabetes test strips before each round of competitive bidding to assist CMS in ensuring that bidding suppliers meet the 50-percent rule. Initially, compliance with the 50 percent rule was assessed using mail order claims only. The Bipartisan Budget Act of 2018 amended the 50-percent rule by requiring that, for bids on or after January 1, 2019, CMS must use data from the non-mail order Medicare market as well as the mail-order one. Since 2010, OIG has been conducting evaluations of the Medicare market shares of diabetes test strips provided via mail order. This is the first OIG evaluation of Medicare market shares for diabetes test strips provided via non-mail order.

HOW WE DID THIS STUDY

We determined the Medicare market shares for diabetes test strips types associated with a simple random sample of Medicare claims for the 3-month period of April 1, 2018, through June 30, 2018. Our sample of 1,210 claims was drawn from a population of 1,598,926 claims for diabetes test strips provided via non-mail order to Medicare beneficiaries. These 1,210 claims were submitted by a total of 1,192 suppliers of non-mail order diabetic test strips. Of the 1,192 suppliers associated with our sampled claims, 1,143 responded, a 96 percent response rate by suppliers.

  • To estimate the Medicare market share of each type of diabetes test strips provided via non-mail order, we projected our sample data to the population of diabetes test strips provided via non mail order during the timeframe we reviewed. To assist CMS in meeting the Bipartisan Budget Act of 2018's requirement for CMS to use multiple sources of data-including market based data measuring sales of diabetes test strips products that are not exclusively sold by a single retailer-we removed from our analysis diabetes test strips that were sold exclusively by a single retailer.

    • WHAT WE FOUND

    From April through June 2018, sampled suppliers provided 34 types of diabetes test strips via the Medicare National Mail-Order Program. The top 3 strip types accounted for 53 percent of the Medicare mail-order market, and the top 10 strip types accounted for 93 percent of the market.

    Report Type
    Evaluation
    HHS Agencies
    Centers for Medicare and Medicaid Services
    Issue Areas
    -
    Target Groups
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    Financial Groups
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    Notice

    This report may be subject to section 5274 of the National Defense Authorization Act Fiscal Year 2023, 117 Pub. L. 263.