Medicare durable medical equipment: effect of new bid surety bond requirement on small supplier participation in the competitive bidding program : report to Congressional committees
Why GAO did this study. To achieve Medicare savings and address fraud concerns, Congress required that CMS, in the Department of Health and Human Services (HHS), phase in a CBP for certain DME product categories in designated geographical (or CBP) areas. CBP Round 2021 began on January 1, 2021, and included two product categories (off-the-shelf knee braces and off-the-shelf back braces) in a total of 235 CBP area and product category combinations (known as competitions). CMS estimated that round 2021 will save Medicare more than $600 million over the 3-year contract period. The Medicare Access and CHIP Reauthorization Act of 2015 included a provision for GAO to evaluate the effect of the new bid surety bond requirement on small supplier participation in the CBP. CMS defines small suppliers as those generating $3.5 million or less in total gross Medicare and non-Medicare revenue annually. This report describes 1) the extent to which small suppliers participated in CBP round 2021 and 2) what is known about how the bid surety bond requirement and other factors affected or may affect small supplier participation in the CBP. GAO reviewed bidding process and contract award data; interviewed CMS officials; and interviewed representatives from two national DME industry trade organizations, including six of their small DME supplier members, that GAO selected based on their familiarity with the CBP and the new bid surety bond requirement. HHS provided technical comments on a draft of this report, which GAO incorporated as appropriate.
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