Why OIG Did This Review. 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. The Centers for Medicare & Medicaid Services' (CMS) analysis found that the program is saving money without compromising beneficiary health outcomes. Round 2 was a significant expansion of the program to more geographic 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. How OIG Did This Review. We used Medicare claims to identify two populations of beneficiaries for whom Medicare paid claims before Round 2 of the Competitive Bidding Program began in 2013. The first population included those with paid claims for CPAP/RAD devices; the second, those with paid claims for CPAP/RAD supplies. Using discontinued payments after Round 2 began as a proxy for disrupted access within each population, we compared the rates of discontinued payments in areas that were part of the program and areas that were not. In addition, we drew samples of beneficiaries for whom device payments stopped and for whom supply 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. Our survey results are not projectable but provide some context for a sample of beneficiaries. What OIG Found. Nearly all beneficiaries who in 2013 started using what we refer to in this report as CPAP/RAD devices--i.e., continuous positive airway pressure (CPAP) devices or respiratory assist devices (RADs)--appeared to have continued access to them after Round 2 of the Competitive Bidding Program for durable medical equipment began in July 2013. Medicare payments for devices continued for at least 96 percent of these beneficiaries after Round 2 began. Our surveys provided some anecdotal context for a sample of beneficiaries for whom payments for devices stopped. For example, their physicians told us that the beneficiaries still needed the devices, and beneficiaries generally reported continuing to use them. We also found that Medicare payments for supplies stopped for 46 percent of beneficiaries in Round 2 competitive bidding areas (CBAs) compared to 33 percent in areas that were not CBAs (which we refer to as non-CBAs). In 2012, the year before Round 2 began, 35 percent of beneficiaries who had a paid claim for CPAP/RAD supplies in the first half of the year did not have a paid claim in the second half of the year. Our surveys provided some limited insights for a sample of beneficiaries without continued supply payments. For example, their physicians told us that the beneficiaries still needed the devices after Round 2 began. However, only half of responding beneficiaries reported needing supplies and nearly all of those beneficiaries reported getting needed supplies. What OIG Concludes. Round 2 of the Competitive Bidding Program did not appear to disrupt 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 less conclusive regarding whether the program disrupted beneficiary access to CPAP/RAD supplies. We saw a bigger decline in claims for supplies in Round 2 CBAs than in non-CBAs. 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.
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