Medicare: Competitive Bidding for Medical Equipment and Supplies Could Reduce Program Payments, But Adequate Oversight Is Critical: Congressional Testimony

Kathleen M. King

oct 2008 · DIANE Publishing

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Medicare has paid higher than market rates for medical equip. and supplies provided to beneficiaries under Medicare Part B. Medicare has used fee schedules based on historical charges to set payment amounts. But this approach lacks flexibility to keep pace with market changes and increases costs to the fed. gov¿t. CMS is required to test competitive bidding as a new way to set payments. CMS did this through a demonstration in two locations in which suppliers could compete on the basis of price and other factors for the right to provide their products. This testimony describes the effects that competitive bidding could have on Medicare program payments and suppliers and the need for adequate oversight to ensure quality and access. Illustrations.