Get Ready for Medicare Price Cuts on Medical Supplies

Starting Monday, July 1, a new Medicare competitive-bidding program will mean lower costs for the more than 15 million beneficiaries who order diabetes supplies and other medical equipment, such as wheelchairs, hospital beds and walkers.

This will especially affect those who receive their diabetic testing strips and lancets by mail - about 50 to 60 percent of diabetic patients, according to the New York Times.

The competitive-bidding program - the official mouthful is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies ( DMEPOS) Competitive Bidding Program - will mean that only 18 companies nationwide, rather than hundreds, have been approved to sell mail-order supplies for beneficiaries with diabetes.

Beneficiaries will also have the option to buy their supplies from a Medicare-enrolled store or pharmacy. The good news is that the co-pay on some orders could drop from an average $15 to less than $5.

The change is part of the Obama administration's efforts to rein in Medicare overspending and supplier fraud. A pilot program, started two years ago in nine metropolitan areas, reduced Medicare costs by 42 percent, or $202 million; the national program is expected to save $42.8 billion over the next 10 years.

As the Times reports, mail-order diabetes supplies in particular "have caused Medicare headaches for years."

A government investigation last year found that 20 percent of suppliers were charging Medicare the more expensive retail rate for testing strips, even though beneficiaries had been sent strips by mail, which costs less. Under the new program, Medicare will pay the same rate for both mail-order and retail suppliers.

"It's been an area where there's been a lot of fraud, a lot of overutilization and a lot of studies saying Medicare pays too much, the taxpayer pays too much and beneficiaries with a 20 percent co-pay pay too much, too," Laurence Wilson, director of Medicare's chronic care policy group, told the Times.

There has been some talk that Congress could delay the start of the program in the face of intense lobbying by medical-equipment companies, notes  Forbes.com. A bipartisan letter signed by 227 members of the House asked Medicare head Marilyn Tavenner to hold off implementing the program this year, but so far the July 1 start date is still intact.

The tough part of the new program may be in getting the word out and helping consumers understand the changes.

Here's what you need to know:

To find an approved Medicare contract supplier, call 800-MEDICARE (800-633-4227), or visit medicare.gov/supplierdirectory and enter your zip code.

The American Diabetes Association also has helpful tips for Medicare beneficiaries who may be confused by the changes, including this one for those who get their supplies at a pharmacy: Make sure to ask if the store accepts "Medicare assignment." This means the store will accept the Medicare-approved amount as payment in full, and you cannot be charged more than a 20 percent co-pay (after you meet your deductible). If a local store does not accept Medicare assignment, you may be charged more than the 20 percent co-pay. Check with the store to find out what your payment will be.

 

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