AP NewsBreak: Competition cuts down Medicare fraud

RICARDO ALONSO-ZALDIVAR

Asso­ci­ated Press

WASHINGTON — A year­long exper­i­ment with com­pet­i­tive bid­ding for power wheel­chairs, dia­betic sup­plies and other per­sonal med­ical equip­ment pro­duced $200 mil­lion in sav­ings for Medicare, and gov­ern­ment offi­cials said Wednes­day they are expand­ing the pilot pro­gram in search of even greater dividends.

The nine-city crack­down tar­get­ing waste and fraud has drawn a strong protest from the med­ical sup­ply indus­try, which is warn­ing of short­ages for peo­ple receiv­ing Medicare ben­e­fits and eco­nomic hard­ship for small sup­pli­ers. But the shift to com­pet­i­tive bid­ding has led to few com­plaints from those in Medicare, accord­ing to a new gov­ern­ment report.

The report found only 151 com­plaints from a total pop­u­la­tion of 2.3 mil­lion Medicare recip­i­ents in the nine met­ro­pol­i­tan areas, includ­ing Miami, Cincin­nati and River­side, Calif.

As a result, the pro­gram is expand­ing to a total of 100 cities next year, along with a national mail order pro­gram for dia­betes sup­plies such as blood sugar test­ing kits. Even­tu­ally the whole coun­try will participate.

Medicare tra­di­tion­ally has strug­gled to man­age med­ical equip­ment costs. Offi­cials say the pro­gram often paid more than pri­vate insur­ers for com­pa­ra­ble equip­ment and was vul­ner­a­ble to fraud by unscrupu­lous sup­pli­ers order­ing expen­sive but unneeded prod­ucts for unwit­ting beneficiaries.

By shift­ing to com­pet­i­tive bid­ding with a lim­ited num­ber of approved sup­pli­ers in each area, Medicare will save nearly $26 bil­lion from 2013–2022, the gov­ern­ment esti­mates, and reduce costs for seniors with­out cut­ting benefits.

“What we see is that costs are lower and there is no impact on the health sta­tus of our ben­e­fi­cia­ries,” said Jonathan Blum, deputy admin­is­tra­tor for Medicare. “This gives us very strong con­fi­dence that we can expand the pro­gram. To us, this is a clear success.”

The home-care sup­ply indus­try sharply ques­tioned that conclusion.

“With respect to the num­ber of com­plaints (the report’s) infor­ma­tion is down­right laugh­able,” said Walt Gorski, a senior lob­by­ist for the Amer­i­can Asso­ci­a­tion for Home­care. “It defies logic.” The group rep­re­sents sup­pli­ers of home health equip­ment, rang­ing from oxy­gen to hos­pi­tal beds.

The indus­try says hun­dreds of econ­o­mists at aca­d­e­mic insti­tu­tions around the coun­try have con­cluded that Medicare’s com­pet­i­tive bid­ding model is flawed and could lead to short­ages or force ben­e­fi­cia­ries to use less desir­able cut-rate equipment.

In its report, Medicare said it closely mon­i­tored the health of ben­e­fi­cia­ries likely to use home equip­ment in the nine areas involved with the com­pet­i­tive bid­ding exper­i­ment. It then com­pared the results to data for ben­e­fi­cia­ries in other sim­i­lar areas where com­pet­i­tive bid­ding has not been insti­tuted yet. Using yard­sticks such as emer­gency room vis­its and nurs­ing home admis­sions, it found no sig­nif­i­cant differences.

“We have not seen any change in health sta­tus or access to ser­vices once the pro­gram went into place,” said Blum.

The report said the Medicare con­sumer hot­line received 127,466 calls from ben­e­fi­cia­ries about the com­pet­i­tive bid­ding pro­gram dur­ing 2011, less than 1 per­cent of the total vol­ume of calls received. Most involved rou­tine mat­ters, such as locat­ing a supplier.

Medicare defined com­plaints as dis­sat­is­fac­tion that could not be resolved by a call cen­ter oper­a­tor. It reg­is­tered 151 com­plaints for the year, the vast major­ity in the first six months of the pro­gram. Only six com­plaints were logged in the last three months of the year.

Medicare also called a sam­ple of ben­e­fi­cia­ries in areas where there was a sharp drop the quan­ti­ties of sup­plies ordered for dia­betes test­ing and for sleep apnea machines. The report said “in vir­tu­ally every case” the ben­e­fi­ciary reported hav­ing more than enough sup­plies on hand, often sev­eral months’ worth.

“This would sug­gest that ben­e­fi­cia­ries received exces­sive replace­ment sup­plies before they became med­ically nec­es­sary,” accord­ing to the report

The nine met­ro­pol­i­tan areas involved in the exper­i­ment were Charlotte-Gastonia-Concord (North Car­olina and South Car­olina); Cincinnati-Middletown (Ohio, Ken­tucky and Indi­ana); Cleveland-Elyria-Mentor (Ohio); Dallas-Fort Worth-Arlington (Texas); Kansas City (Mis­souri and Kansas); Miami-Fort Lauderdale-Pompano Beach and Orlando (Florida);, Pitts­burgh; and Riverside-San Bernadino-Ontario (Calif.).

Nine cat­e­gories of med­ical equip­ment are included in the pro­gram: oxy­gen sup­plies, stan­dard power wheel­chairs, com­plex power wheel­chairs, mail-order dia­betic sup­plies, tube-feeding sup­plies and equip­ment, sleep apnea machines and equip­ment, hos­pi­tal beds, walk­ers, and cer­tain types of mattresses.

The major com­po­nents of the $200 mil­lion saved last year were $59 mil­lion from oxy­gen sup­plies and equip­ment, $51 mil­lion from mail-order dia­betic sup­plies and nearly $40 mil­lion from power wheel­chairs and sim­i­lar devices.

Posted by AP News on Apr 18 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.