A Medical Device Daily

The Centers for Medicare and Medicaid Services late Monday issued a final rule for competitive bidding in Medicare for certain durable medical equipment, prosthetics, orthotics and supplies.

In a statement, CMS said that in 2008 the competitive bidding program will operate in competitive bidding areas within 10 of the largest Metropolitan Statistical Areas (MSAs), excluding the New York, Los Angeles and Chicago MSAs for logistical reasons. The program will apply to 10 of the top durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) product categories outlined in the final rule.

The program will be expanded into 70 additional MSAs in 2009, and after 2009 CMS will expand the program to additional areas and items, the agency said.

Leslie Norwalk, acting administrator of CMS, in a statement, said that the final rule "is focused on improving both service delivery and the quality of care, while getting savings for beneficiaries and taxpayers."

But some analysts said the new rule would force suppliers to close and hurt Medicare beneficiaries' access to services, citing the availability of oxygen as one such service that might be cut off to beneficiaries.

Others said that the competitive bidding approach would serve to squelch innovation since improvements to products or new products, likely to cost more, would be at a clear disadvantage in a bidding environment

The competitive bidding program was mandated by the Medicare prescription drug law and will replace current payment amounts for items being bid under Medicare's DMEPOS fee schedule with payment rates derived from the bidding process.

CMS said contracts would be awarded to enough bidders in each competitive bidding area to ensure access and service to high-quality items.

Medicare projected that when the program is fully implemented in 2010, it will save $1 billion annually.

It said that DME was picked first for competitive bidding because of the relatively small number of claims involved — 68 million in FY04. After gaining experience with DME claims bidding, the agency plans to extend it to hospital and doctor claims.

CMS is creating a limited exception to the competitive bidding requirement that will allow certain treating professionals — including physicians, physician assistants and occupational and physical therapists — to furnish items on the competitive bidding list to their own patients without having to participate in bidding and without becoming a contract supplier.

CMS also said it has included several provisions to modify the rule's impact on small suppliers, defined as those having gross revenue of $3.5 million or less annually. Those include a 30% target number for small supplier participation and allowing small suppliers to form networks to participate in the bidding process.

CARE act introduced

The 2007 Consistency, Accuracy, Responsibility and Excellence (CARE) in Medical Imaging and Radiation Therapy bill was introduced in the U.S. Senate by Sen. Michael Enzi (R-Wyoming), and Sen. Ted Kennedy (D-Massachusetts), on March 30.

The bill is supported by the American Society of Radiologic Technologists, which says it represents more than 122,000 medical imaging and radiation therapy professionals.

Christine Lung, director of Government Relations for ASRT (Albuquerque, New Mexico), said she was very encouraged by the introduction of the bill this early in the session. "We weren't expecting the Senate to address the bill until after they returned from their Easter recess on April 16." She added, "We were so close to the bill's being passed during the last congressional session. I think this is our year."

The CARE bill would require those who perform medical imaging and radiation therapy procedures to meet minimum federal education and credentialing standards in order to participate in federal health programs administered by the Department of Health and Human Services.

These programs include Medicare and Medicaid. Under current law, basic training standards are voluntary in some states, allowing individuals to perform radiologic procedures without any formal education.

The Senate passed a version of this bill, the RadCARE bill, in December 2006, but the congressional session ended before the House version of the bill could be brought up for a vote.

In a March 29 letter, Sens. Enzi and Kennedy asked their colleagues in the Senate to join them in sponsoring the bill. With enough co-sponsors, it will go before the Health, Education, Labor and Pensions Committee of the Senate for approval, then to the Senate floor for a vote.

Rep. Mike Doyle (D-Pennsylvania) is sponsoring CARE Bill in the House of Representatives. Currently, 49 representatives are co-sponsoring the bill in the House and 20 more are expected to sign on. Once the bill has 75 cosponsors, Rep. Doyle will ask the chairman of the House's Subcommittee on Health, Frank Pallone Jr. (D-New Jersey), to move the bill to the full Committee on Energy and Commerce.

The ASRT represents more than 122,000 members who perform medical imaging procedures or plan and deliver radiation therapy. The society bills itself as the largest radiologic science association in the world.

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