|Contour Plus glucose monitor--Courtesy of Bayer's Ascensia Diabetes Care|
Medicare's Competitive Bidding Program has long earned the ire of industry, especially when applied to mail-order diabetes supplies like test strips and blood lancets. Following nationwide implementation in 2013, Abbott's ($ABT) diabetes quarterly device sales fell 9.6% to $313 million, while Johnson & Johnson's ($JNJ) $500-million-plus diabetes device segment experienced an 8.7% decline.
Clinicians and patient advocates are also joining the fight to suspend the program, under which suppliers bid to offer the devices via Medicare at the lowest cost.
A study in Diabetes Care, the journal of the American Diabetes Association, found the program disrupted access to the supplies, "leading to increased migration to partial/no SMBG (self-monitoring of glucose device) acquisition with associated increases in mortality, inpatient admissions, and costs."
The team of researchers from Medtronic ($MDT), hospitals and the non-profit National Minority Quality Forum looked at the Medicare claims data of more than 500,000 beneficiaries between 2009 and 2012. They found that there was 23% increase in partial or no acquisition of testing supplies among the 43,939 beneficiaries who lived in markets where the program was in place.
The competitive bidding program for mail-order diabetes supplies was taken nationwide in 2013. The Centers for Medicare and Medicaid Services has consistently denied that the initiative poses a risk to public health.
"We are troubled that CMS failed to detect these 'unintended' consequences and, instead, reported that the program was a success," said study author Gary Puckrein, who's the CEO of the National Minority Quality Forum, in a statement. "Based on our findings and employing the safety monitoring protocols commonly used to protect human subjects, we believe policymakers should immediately suspend the program until CMS can demonstrate its ability to effectively monitor the effects of the program, correct the structural flaws causing this problem and ensure that the lives of America's greatest generation are no longer at risk."
It appears that studies like this one are getting the attention of the feds, albeit perhaps not the bureaucrats at CMS. In its FY 2016 agenda--which mainly promised to look for ways to tighten CMS reimbursement of devices, to the detriment of industry--the Office of the Inspector General agreed to take a closer look at competitive bidding for certain types of durable medical equipment, prosthetics, orthotics, and supplies.
The government watchdog said "anecdotal reports show that competitive bidding has led to reduced access to DME (durable medical equipment) and, in turn, compromised the quality of care beneficiaries receive."
Meanwhile, Abbott responded to the shifting reimbursement by last year launching what is said is the cheapest glucose monitoring system in the over-the-counter market (which is not directly impacted by the competitive bidding program for mail-order diabetes supplies). Bayer in January completed the sale of its diabetes care business to KKR-owned Panasonic Healthcare for €1.022 billion ($1.16 billion).