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Newsletters: Competitive Bidding
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Competitive Bidding

Kendall Van Pool, National Home Infusion Association (NHIA)

Competitive bidding is a Medicare program for durable medical equipment—including enteral nutrition (EN, tube feeding). It is being phased in with the intent to save Medicare money. Under this program, the purchase process has changed for providers of certain home medical equipment and products. Only providers that submit a winning bid in a certain area will be reimbursed for supplies and services in that area. If you are on Medicare and have noticed changes in your provider, it may be due to competitive bidding.

 

Determining Price

Medicare determines the Single Payment Rate (SPR) for a specific product category by lining up all the “qualifying” bids from low to high. They then identify the “pivotal bid,” which is the bid that gets them to 120 percent anticipated demand. They ignore all bids higher than the pivotal bid, which could include a provider that provides high quality care.

Medicare then determines the median bid between the low and pivotal bids, and this is the SPR. The SPR does not change if suppliers that bid decide not to sign a competitive bidding contract. Centers for Medicare & Medicaid Services (CMS) may offer a contract to a bidder that was originally excluded based on the pivotal bid in order to get to anticipated demand (because some may decline to sign), but the SPR does not change. So in other words, Medicare has put cheaper pricing ahead of quality health care.

 

Reporting Problems

There have been many challenges with competitive bidding since the program began in 2011. Despite this, on July 1, 2013, the program expanded to ninety-one metropolitan areas across the country. The National Home Infusion Association (NHIA) and the Oley Foundation are encouraging Medicare patients and providers who experience any issues with transitioning to a new provider to file complaints with the Competitive Bidding Ombudsman (go to www.cms.gov or call 800-MEDICARE and ask for “competitive acquisition ombudsman”). Please share your concerns with the Oley Foundation, as well, so we can advocate on your behalf.

Alert Oley as to your issues and concerns as well. We are better able to advocate on your behalf if we have specifics about your challenges as a result of competitive bidding.

LifelineLetter, July/August 2013 and September/October 2013

more Calendar

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2/18/2017 » 2/21/2017
Oley exhibit at A.S.P.E.N.'s Clinical Nutrition Week

This website is an educational resource. It is not intended to provide medical advice or recommend a course of treatment. You should discuss all issues, ideas, suggestions, etc. with your clinician prior to use. Clinicians in a relevant field have reviewed the medical information; however, the Oley Foundation does not guarantee the accuracy of the information presented, and is not liable if information is incorrect or incomplete. If you have questions please contact Oley staff.

 

Updated in 2015 with a generous grant from Shire, Inc. 

 

This website was updated in 2015 with a generous grant from Shire, Inc. This website is an educational resource. It is not intended to provide medical advice or recommend a course of treatment. You should discuss all issues, ideas, suggestions, etc. with your clinician prior to use. Clinicians in a relevant field have reviewed the medical information; however, the Oley Foundation does not guarantee the accuracy of the information presented, and is not liable if information is incorrect or incomplete. If you have questions please contact Oley staff.
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