Competition cuts down Medicare fraud

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 patients 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 and Orlando.

So, the program is expanding next year, along with a national mail order program for diabetes supplies. Eventually the whole country will participate.

(In a separate action, in June Medicare will require that patients in Florida and other states with high rates of billing abuse get preauthorization from Medicare before receiving power wheelchairs and scooters.)

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 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 by 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. The group represents suppliers of home health equipment.

Competition cuts down Medicare fraud 04/18/12 [Last modified: Wednesday, April 18, 2012 7:40pm]

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