Competitive Bidding Program For Durable Medical Equipment

In an effort to increase quality and reduce costs for durable medical equipment purchased with medicare dollars, the Centers for Medicare and Medicaid Services will be initiating a competitive bidding process. What this means is that only approved suppliers will be selected to distribute durable medical equipment to medicare eligible patients. While this program is intended to improve many aspects of the medical supply chain for medicare recipients, it has been posited that the program may have adverse effects on the medical supply industry.

Currently, there are a number of medical supply distributors across the country that have developed much of their business by providing durable medical equipment to medicare eligible patients. Because of the bidding process being implemented, many of these suppliers will no longer be able to provide this equipment and receive medicare reimbursement. As a result, a significant amount of business will be transitioned to the approved supplier. While this does lock in an approved cost and product quality level for medicare payout, it also restricts competition and will have a negative impact on smaller business.

Speculation on the program indicates that it is likely that initially there will be increased quality and lower cost for durable medical equipment from these approved suppliers. However, critics have suggested that the long term effect will drive down business for many smaller businesses, and creating a monopoly-like structure, will in the long term drive up costs and decrease quality as well as significantly affecting the small business market.