CMS BLOG
http://blog.cms.gov/2016/06/07/the-proof-is-in-the-numbers-dmepos-and-health-outcomes-data

June 7, 2016
By Sean Cavanaugh, CMS Deputy Administrator and Director, Center for Medicare

The Proof is in the Numbers: DMEPOS and Health Outcomes Data

When the Medicare program implements changes to how it pays for medical care or equipment, CMS monitors to make sure that any adjustments meet our goals of preserving access to care and facilitating better health outcomes for Medicare beneficiaries.

CMS has implemented changes to how Medicare pays for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) over the last few years. Following numerous studies from the HHS Office of Inspector General and the Government Accountability Office showing the DMEPOS payments to be excessive, Congress passed legislation requiring competitive bidding for DMEPOS. Since 2011, CMS has implemented those changes to ensure that people with Medicare get the equipment they need while reducing costs for beneficiaries and taxpayers.

Round 1 Rebid of the DMEPOS competitive bidding program has saved more than $580 million in nine markets between January 1, 2011 and December 31, 2013. And Round 2 and the national mail order programs have saved approximately $3.6 billion between July 1, 2013 and June 30, 2015.

Earlier in 2016, in compliance with statute, we phased in the adjusted DMEPOS fee schedule rates using competitive bidding information across the country in the non-competitive bidding areas. This has been a gradual implementation, with a blend of 50 percent of the unadjusted payment rates and 50 percent of the adjusted payment rates beginning on January 1, 2016. We use a real-time monitoring system to ensure beneficiaries are receiving the equipment they need. This system has been in place since the beginning of the program and tracks access to items and services and a number of clinical outcome measures such as mortality, hospitalizations, and emergency room visits.

On May 17, 2016, we posted monitoring data that shows our efforts have saved the Medicare program money while continuing to ensure access to equipment for all who need it in the non-competitive bidding areas. Specifically that data showed that suppliers in non-competitive bidding areas have continued to accept the new, adjusted DMEPOS payments. 

At the time that we posted the data on acceptance of the new, adjusted rates, we indicated that we would soon be furnishing monitoring data on health outcomes for beneficiaries in non-competitive bidding areas.  The health outcomes monitoring data are now available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/Fee-Adjustment-Monitoring.html.

We have been monitoring health outcomes data closely and have not detected any changes in the number of deaths, hospital and nursing home admission rates, monthly hospital and nursing home days, physician visit rates, and emergency room visits in 2016 (after the new, adjusted DMEPOS payment rates were in place) compared to 2015 (before the new, adjusted DMEPOS payment rates) in the non-competitive bidding areas. For example: In 2015, between seven and nine percent of beneficiaries using oxygen equipment in non-contiguous areas such as Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands made emergency room visits for various reasons, which may or may not have been attributed to the oxygen equipment items and services they received.  For the first four months of 2016, this rate of emergency room visits for users of oxygen equipment in these areas has not changed.  This result indicates that the change in payment for oxygen and oxygen equipment did not result in an increase in emergency room visits, as no increase in visits has been observed.  This is true for all beneficiaries in these areas, including those who have been diagnosed with a condition that might indicate the need for oxygen and oxygen equipment.

In addition to continued high acceptance of the new, adjusted DMEPOS payment rates from providers and suppliers and steady health outcomes across all non-competitive bidding areas, the amount of these supplies and services furnished in non-competitive bidding areas has remained steady as well. This means that providers and suppliers are both accepting the new, adjusted payment rates and are still providing the same volume of these suppliers to beneficiaries.  Additionally, calls received by 1-800-Medicare staff related to access to DMEPOS items and services declined in the first quarter of 2016 compared to the number of calls received in the first quarter of 2015.

Based on these monitoring efforts, we continue to believe that the partially adjusted fees implemented in January 2016 have had no negative impact on beneficiary access to quality items and services. We will continue to monitor all data very closely leading up to and following implementation of the phase-in of the fully adjusted DMEPOS fee schedule adjustments on July 1, 2016.