SCGhealth Blog

Does Medicare have a DME delivery problem?

Wednesday, August 13, 2014

The Midland Daily News, a small paper in Michigan, waded this week into what is becoming a bit of a sticky issue nationwide – patient access to consistent delivery of the most medically appropriate DME supplies. 

Its coverage, which is fairly sophisticated for a smaller paper when it comes to Medicare policy, takes on the case of a liquid oxygen dependent patient who is being pressured to change as a result of DME Competitive Bidding. 

The patient was diagnosed with lymphangioleiomyomatosis, a rare lung disease that requires her to use liquid oxygen, as ordered by her doctor. She awaits a double lung transplant. 

When competitive bidding came to her area, the company wanted to switch her from liquid oxygen to a lower cost ambient air concentrator, the story reports. She has thus far been able to resist the switch by arguing for the medical need of the liquid oxygen. 

That doesn’t mean, however, that other patients aren’t seeing similar switches and that this supplier won’t continue to try to push a lower cost solution. 

Purpose was to lower cost
DME has historically been seen by CMS and the HHS Office of Inspector General as one of the easier avenues to commit Medicare fraud. Daytime television used to be full of advertisements guaranteeing patient access to Medicare funded power mobility devices. 

After a major investigation into fraud involving the power devices in the middle of the last decade, Medicare has cracked down with much tighter device rules. As a result, the commercials and costs have both dropped.

In addition, a DME supply chain made up of smaller stores and suppliers operating market by market was not seen as an efficient use of Medicare resources. Cost and overhead were naturally higher, given the fragmentation of the market. 

Under competitive bidding, companies would submit bids to serve geographic areas, and presumptively Medicare would benefit by paying a lower price for supplies. Patients, on the hook for a percentage of Medicare expenses, would also benefit.

Having now gone through two rounds of bidding and re-competing for DME contracts, CMS has made the case that the program is working as intended, most recently as reported by Inside Washington Publishers.

Patients tell a different story. In some cases, so do Medicare Administrative Contractors. NHIC, one of the DME MACs, reminded competitive bidding suppliers in late June that they are not allowed to require the patients to pick up oxygen and oxygen supplies. 

The Center for Medicare Advocacy, a patient advocacy group, details a series of complaints made by patients in Medicare Competitive Bidding areas. Most of the patient problems have centered around these issues: 

·        Long delivery times: Patients are complaining that ordered suppliers are not being delivered in a timely manner, imperiling health and wellness.
·        Refusal to provide: DME suppliers are refusing to supply certain items, even though they have been properly prescribed and approved for the patient. In many cases, the DME stops carrying a certain item for cost purposes, leaving the patient to try to find an alternate supplier or change supplies.
·        Refusal to deliver: This refers to the above reminder by NHIC. Part of the competitive bidding process is that the supplier is supposed to factor in delivery costs as part of the bid, because delivery is a required component. Further, the supplier is required to arrange delivery at the point of discharge from a SNF or other facility, not make the patient wait for a shipment via the regular mail.
·     Repair obligation: Supplies are not following up to assist patients with device repair in a timely fashion, forcing the patient to seek other options.

      The Center for Medicare Advocacy is naturally going to reflect patient complaints – that is its purpose. It has also pointed out problems with set up and delivery. The general theme of the complaints is that the DME supplier, which is locked into price structure under competitive bidding, is looking to recover revenue on the cost side, at the expense of patient satisfaction.
      As part of the purpose of the DME competitive bidding program is to reduce the choice of suppliers to cut costs, this would logically place an added burden on the patient to find another option among a dwindling base of choices.

      Short of an uproar large enough to get Congressional attention, it’s doubtful that Medicare will scale back its DME competitive bidding ambitions. 

      As  it stands now, there remains a disagreement over the scope of any concerns over the current program, and it is pretty clear that competitive bidding is having a positive impact on cost and making it easier to monitor potential fraud because there is a smaller volume of suppliers.  

      For providers who prescribe DME, your best bet is to try to refer your patients to a supplier that you have confidence in – if one exists in your area, and to ensure that you stress the medical need of the specific item of DME that you prescribe, with documentation to back it up.

SCG Health blog by Email

Recent Posts



SCG Health is a tradename of the Searfoss Consulting Group, LLC. You may reproduce materials available on this site for your own personal use and for noncommercial distribution. For more information, please read the Content Sharing Policy. Art & design by SCG Health. DISCLAIMER: You should consult an attorney for individual advice regarding a particular set of facts and circumstances. SCG Health reserves the right to change the information on this website without notice.