For years, Medicare beneficiaries and taxpayers have paid too much for home medical equipment such as wheelchairs and oxygen supplies. To reduce costs and the fraud that results from excessive prices, Medicare has introduced a competitive bidding program.
Competitive bidding already has proved to save money for taxpayers and people with Medicare while maintaining access to quality medical goods and services. Round 1 of the program was very successful, reducing costs for certain products and services by more than 42 percent in nine areas of the country, including the Inland Empire region of Southern California. Now the program's benefits are coming to the Bay Area, and here's some information on how it works.
Round 2 of the program is scheduled to begin in 91 new areas across the country on July 1, including Alameda, Contra Costa, Marin, San Francisco and San Mateo counties. It's projected to save people with Medicare in these Bay Area counties an average of 47 percent on certain products. Those products are:
Medicare also is launching a nationwide mail-order program for diabetic testing supplies on July 1. Beneficiaries will save an average of 72 percent on those supplies.
Before competitive bidding, the costs for most of these items were based on historical charges, adjusted for inflation over time. Many studies have shown that the prices Medicare pays are excessive -- sometimes three or four times higher than retail prices or amounts commercial insurers pay.
Under this program, suppliers submit bids for equipment and supplies that must be lower than what Medicare pays for these items currently. Medicare uses the bids to set the amount it pays for the competitively bid medical equipment and supplies and qualified, accredited suppliers with winning bids are chosen as Medicare contract suppliers.
Since Medicare is paying less, your coinsurance will be less, too. Medicare generally pays 80 percent of the cost of supplies used in the home under Part B. People with Medicare pay the remaining 20 percent.
If you have Original Medicare, your permanent residence is in a ZIP code within a competitive bidding area, and you use items in one of the program categories, you generally must use a Medicare contract supplier in order for Medicare to help pay for the item. If you currently receive oxygen or oxygen equipment, or rent certain other items from a non-contract supplier, you may be able to continue renting these items from your current supplier after July 1 if the supplier chooses to become a "grandfathered" supplier.
Suppliers must be accredited and meet stringent quality standards to ensure good customer service and high-quality items. This means you'll be getting the same high-quality products and services, but at lower cost.
Medicare has resources to help you understand the new program, including www.medicare.gov and 800-MEDICARE (800-633-4227). TTY users call 877-486-2048. You can also call your local State Health Insurance Counseling and Advocacy Program, at 800-434-0222.
If you're in a Medicare Advantage Plan (like an HMO or PPO), your plan will notify you if your supplier is changing. Contact your plan for more information.
David Saÿen, of Alameda, is Medicare's regional administrator for Arizona, California, Hawaii, Nevada, and the Pacific Trust Territories.