Medicare Announces Substantial Savings For Medical Equipment Included In The Next Round Of Competitive Bidding Program

By Jonathan Blum, Acting Principal Deputy Administrator and Director, Center for Medicare

Last week, the Centers for Medicare & Medicaid Services (CMS) announced new, lower Medicare prices that will go into effect this July in a major expansion of the DME Competitive Bidding Program from nine areas to 91 areas. The CMS Office of the Actuary estimates that the program will save the Medicare Part B Trust Fund $25.7 billion and beneficiaries $17.1 billion between 2013 and 2022. Medicare beneficiaries in these 91 major metropolitan areas will save an average of 45 percent for certain DME items scheduled to begin on July 1, 2013.

To reduce costs and the fraud resulting from excessive prices, CMS introduced a competitive bidding program in nine areas of the country in 2011. Under the DME competitive bidding program, Medicare beneficiaries with Original Medicare who live in competitive bidding areas will pay less for certain items and services such as wheelchairs, oxygen, mail order diabetic supplies, and more. Competitive bidding for DME is proven to save money for taxpayers and Medicare beneficiaries while maintaining access to quality items and services.

Additionally, Medicare beneficiaries across the country will save an average of 72 percent on diabetic testing supplies under a national mail-order program starting at the same time.

Medicare thoroughly vets all suppliers before awarding them contracts in the program. Suppliers must be accredited and meet stringent quality standards to ensure good customer service and high quality items. We have also monitored the program areas extensively, and real-time monitoring data have shown successful implementation with very few beneficiary complaints and no negative impact on beneficiary health status based on measures such as hospitalizations, length of hospital stay, and number of emergency room visits compared to non-competitive bidding areas.  CMS will employ the same aggressive monitoring for the MSAs added in Round 2.

A full list of the new prices and included items is available at


By Jonathan Blum, Acting Principal Deputy Administrator and Director, Center for Medicare

The Centers for Medicare & Medicaid Services (CMS) is pleased to announce the latest group of Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings program.  This is the third group since the Medicare Shared Savings program was launched over a year ago.


ACOs are groups of doctors and other health care providers that have agreed to work together to treat individual patients across care settings.  They share—with Medicare—any savings generated from lowering health care costs while meeting standards for quality of care and providing patient-centered care.


If you have one of these new ACOs in your area, it means that physicians will work together as a team to better share information and coordinate your treatment. 


ACOs are just one of a host of Affordable Care Act provisions that improve Medicare—for example, when you go home from the hospital, you’ll get the care you need to reduce the risk of going back to the hospital.  All of these are designed to increase the value of health care services and they were all put in place by the Affordable Care Act. 


Across the country, 106 new Medicare Shared Savings Program ACOs began operation in January.  They’re located in 47 states and territories—from the most remote community in Montana to as far away as Puerto Rico. 


Roughly half of all Medicare Shared Savings ACOs are physician-led organizations that serve fewer than 10,000 beneficiaries.  Approximately 20 percent of ACOs include community health centers, rural health centers and critical access hospitals that serve low-income, and rural communities.  Fifteen of the new ACOs qualified to be “Advance Payment ACOs,” an innovative model designed especially for entities such as small doctors’ practices or hospitals and doctors that work in remote rural areas.


That’s good news for people with Medicare. 


Great health care is not simply a matter of showing up at your doctor’s office and getting a problem fixed.  It means physicians coordinating and improving the overall standard of care for their patients, which means important gains in patient safety, care quality, and value.


In other words, great health care requires a team that will work together at every stage of your care, which can lead to better health at lower cost.  That’s the aim of the ACOs.  Affordable Care Act reforms such as ACOs have helped to set Medicare on a more sustainable path today and into the future, as well as serve as a model for what improvements are possible for our nation’s health care system.


And that’s good news for all Americans.

Tying Medicare Payment to Quality

By Patrick Conway, MD, MSc  

CMS Chief Medical Officer and Director of the Center for Clinical Standards and Quality

In mid-December, the Centers for Medicare & Medicaid Services (CMS) posted one of the most important steps we’ve taken yet for Medicare reform. 

Go to and you’ll find a chart labeled FY 2013 HVBP Payment Adjustment Factors with provider numbers and percentages.  This chart is the latest sign of how serious Medicare is when it comes to making sure its beneficiaries get the best quality care. 

The Hospital Value-Based Purchasing Program is one of a host of Affordable Care Act programs that put patients at the center of the Medicare system.  We’ve known for a long time that when Medicare paid providers based on how much work they did and not on how well they did for patients, too often patients got services and tests that didn’t improve their health.  Providers already must publicly report the steps they take to provide quality care to Medicare beneficiaries; Hospital Value-Based Purchasing gives these efforts additional teeth. 

Beginning in 2013, Medicare will start paying hospitals a little more or a little less in each payment depending on how well they meet Medicare’s quality standards.  The value-based payment adjustment factors tell them how much their base Medicare payments will change.

Hospitals are graded on improvement as well as performance on a variety of quality measures.  These standards are consistent with clinical practice for the provision of high quality care.  Did emergency room staff follow the right protocols with a heart-attack patient?  Did a patient get antibiotics before surgery?  Did your nurses and doctors listen to you?

Hospital Value-Based Purchasing is a carefully crafted program.  It’s built on the same recommendations that private purchasers of health care and the Institute of Medicine have recommended and tested for a decade or more.  It does not add to the deficit.  One percent of the base Medicare payment for each Medicare patient discharged from an eligible hospital funds the FY 2013 program.  CMS consulted with a wide range of stakeholders—from hospitals to patient advocates—every step of the way. 

CMS reviewed nine months of data from July 1, 2011, to March 30, 2012 measure both performance and improvement in the first year of the program.  We published our initial calculations in April, gave hospitals updated calculations in October, and posted these final adjustment factors only after the hospitals had a chance to review them.  And, only 15 hospitals out of almost 3,000 asked us to review our calculations. 

If you go to the chart, you’ll see the base payment adjustments that Medicare will be making for every single discharge from an eligible hospital, depending on the quality of care the hospital provided.  This demonstrates Medicare’s commitment to ensuring that its beneficiaries get the best quality care. 

In the next few years, as payment incentives gradually increase and more quality measures are added to the program, we will continue working with hospitals to make sure Medicare beneficiaries’ quality of care improves.  The Hospital Value-Based Purchasing program is off to a strong start.  Posting the value-based payment adjustment factors may seem like a routine step, but it actually heralds a new era in which Medicare actively promotes the best care for beneficiaries and makes their health priority #1.

The New Making Medicare Information Clearer & Simpler

Did you ever get a government notice you didn’t understand? Have you ever gone to a website and hunted and clicked forever to find what you were looking for—or even worse, leave empty handed? We know how frustrating it can be, which is why we’ve given  a new design that makes it faster and easier to get answers to Medicare questions.

We know is your trusted source of online Medicare information. That’s why we worked more than 2 years on improving it. We listened to the people who use our website – people like you – and used their feedback to make the website better.

The new includes features not available before, like:

  • Many ways for you to do the most common tasks, like finding out about costs, coverage, and plans, through several paths — right from the homepage, so you can spend more time helping people with the tougher questions
  • Action-oriented labels to help you get the latest information faster
  • Design that works on mobile devices, like tablets and smartphones, so you can get information anytime, anywhere, and in the most convenient format for you

The new is just one of our efforts to make Medicare easier to understand. Whether it’s putting our information in simple, straightforward language so you can understand it the first time you read it or improving the design of the “Medicare Summary Notice” (MSN) so beneficiaries can better understand their Medicare claims, we’re committed to making Medicare information clearer and simpler.

Check it out and tell us how we did—send us a tweet (use #medicaredotgov).

Inspired by SHIP Conference

By Darren Hotton, Utah SHIP Director

I attended the 18th Annual State Health Insurance Program (SHIP) Directors’ Conference earlier this month, down in Atlanta, Georgia. It was great visiting again with my fellow SHIP directors, counselors, community partners, and CMS staff. I always look forward to learning new and innovative ways to grow my local SHIP program, and this year’s program didn’t disappoint. If you missed it, check out the presentation materials available online.

There were plenty of terrific breakout sessions, including ones on best practices in volunteer recruitment, using social media to grow your SHIP, and casework help with deaf and hard of hearing communities and clients with dementia. I can only speak for the sessions I attended, but I’m confident all the breakout sessions pushed the SHIP network to look at other avenues to help improve and enhance their programs.

The plenary sessions were also outstanding, giving us all plenty of food for thought. For example, Dr. Adrienne Mims gave a thought provoking talk on the importance of understanding older Americans’ health. It’s amazing how people with Medicare forget that more prescriptions aren’t always a good thing. Dr. Mims’ presentation reminded the SHIPs that we need to speak with people with Medicare about adverse drug effects. In another session, Kathy Greenlee explained how changes to the Administration on Aging fit with the new federal agency where she serves as administrator, the Administration for Community Living.

For me, one of the highlights each year is the SHIP recognitions. What a wonderful feeling it is for a local SHIP network to get praise from fellow SHIPs. There’s no greater reward than having peers recognize all our hard work over the past year.

I want to thank CMS and the conference planning committee for another great conference. I look forward to improving my program this year with the information I got.

2012 Train-the-Trainer Workshops begin next week

With a mild winter and warm spring past us, this year it’s hard to tell where one season ends and another begins. For those of us in CMS’ Division of Training, a sure sign that summer has arrived is a new round of National Medicare Train-the-Trainer Workshops!

Each year we host a series of two-and-a-half day, face-to-face training events in major cities across the country. Our goal is to share consistent, accurate, current and reliable information with partners who train others—”training the trainer”—so they’re best equipped to help people with Medicare make informed health care decisions.

Our Train-the-Trainer Workshop is a perfect opportunity to learn about changes to CMS programs you may have missed. If you’ve been to one of our workshops in past years, it’s a good chance for you to brush up on your training skills.

We try to keep our sessions lively, interesting and memorable with knowledge checks, exercises, and casework video scenarios. This year’s workshops include:

  • Information on key aspects of Medicare, Medicaid, CHIP, and related legislation
  • A half-day basic track if you want a refresher or if you’re new to Medicare
  • A Web learning resource session to help you find information
  • Plan Finder updates
  • Casework exercises
  • Medicare training modules and workbooks
  • Opportunities to network with CMS staff and other partners who share your commitment
  • A 2012 Resource Card—with the training modules, videos, job aids and more!

Learn more about the workshops and register by visiting our Train-the-Trainer Workshops Web page.  We hope to see you in a workshop this summer!

Encouraging Innovation to Fight Medicaid Fraud

By Julie Boughn 

The Centers for Medicare & Medicaid Services (CMS) is committed to fighting Medicaid fraud, which diverts funds from needed medical care for the most vulnerable Americans.  That’s why we’re announcing a challenge – the Provider Screening Innovator Challenge – to develop software tools that will help stop fraudsters from entering the Medicaid program under the pretense of serving patients.

The Provider Screening Innovator Challenge encourages private sector competition to develop new software that can screen potential Medicaid providers and keep bad actors from ever getting into the program.  Through a series of contests over the next 8 to 9 months, expert software developers will work to create software products, and the best ideas will be awarded prize money.   A total of $600,000 is available for prizes, funded by the Partnership Fund for Program Integrity Innovation, a program within the Office of Management and Budget.

The new software products will include enhanced screening data, such as the results of site visits, criminal background checks, and identity verification.  Fraudsters who try repeatedly to enter Medicaid by altering their applications with a slight change will also be blocked.  The software will also capture licensing information and financial data to spot and stop risky providers.

CMS is conducting this Challenge in partnership with the National Aeronautics and Space Administration, Harvard Business School, the State of Minnesota, and TopCoder (an online community of software engineers, computer scientists, and digital creators).

We eagerly await the ideas and products offered through the TopCoder community to help keep bad actors out of State Medicaid programs.  CMS will also be working with additional States to help us in finalizing software requirements as well as piloting the new software.

The first contest begins May 30th at 6:00 p.m. Eastern Time. Registration information is available at the Center of Excellence for Collaborative Innovation Challenge portal:

Further information about the Provider Screening Innovator Challenge is available at

Ready for the 2012 SHIP Conference?

By Vicki Dufrene, Louisiana SHIP Director

Late spring means the annual SHIP conference is on its way—the 18th Annual SHIP Director’s Conference will be held June 4—7 in Atlanta.

It’s hard for me to believe that almost a year has passed since I found myself surrounded by dear friends and colleagues trying to absorb as much information as possible to help us better serve the aging network in our respective states.

This year’s theme is “Yesterday, Today and Tomorrow…Navigating Healthcare Changes Together.”  Health reform is on the horizon and this conference will give us insight and information to guide our staff, partners and volunteers through the maze of new challenges that will face us as we prepare for 2014.

It’s also a great opportunity to network, share best practices, talk about lessons learned, and learn about new Medicare programs and initiatives.

I’m looking forward to seeing my peers, friends and confidants, as they have proven to be a valuable asset—and even a source of comfort—over the past year.  At last year’s conference, I received a call from my office advising that two of my co-workers were killed in the line of duty.  As my staff and I gathered together to understand what was being told to us, the SHIP network extended their hearts, arms and prayers to comfort us when we needed it the most.  At this conference I hope to thank each one personally for their loving support and encouragement.

The need for a “Strong Start” in life

By Marilyn Tavenner, Acting Administrator for the Centers for Medicare & Medicaid Services

Like most of us, you probably know someone who had a baby born prematurely. These children are at greater risk for complications at birth as well as for developmental and health problems that can impact their quality of life as adults. Premature births are also an economic issue– preterm and premature births cost our country and hard-working families at least an estimated $26 billion each year.

Recently, a report from the World Health Organization, the March of Dimes, Save the Children, and the Partnership for Maternal, Newborn and Child Health found that more than half a million babies in the United States are born preterm each year. That’s more than 130 other countries– almost tying us with Somalia, Thailand, and Turkey. Moreover, early elective deliveries still account for 10-15% of all deliveries in the United States. While the United States excels at treating premature and preterm newborns, it would be better if more of our babies were born at full term.

To safely reduce preterm and premature births, the U.S. Department of Health and Human Services launched the Strong Start initiative earlier this year.  Strong Start builds on the work of American College of Obstetricians, the March of Dimes, and many others to reduce early elective deliveries.  Strong Start also involves change in prenatal care delivery to reduce premature and preterm births and improve outcomes for high-risk pregnant Medicaid beneficiaries and their newborns.

Decreasing early deliveries means:

  • More mothers get safe, evidence-based care and infants improve their chances for good physical and developmental health.
  • Public and private payers may see lower costs because providers are performing fewer caesarian sections for failed inductions, there are fewer neonatal intensive care unit admissions, and there are fewer associated complications for the newborns.

As a mother, I know there’s nothing more important for a child than getting off to a healthy start.  With the right resources and tools, we can make sure mothers and children around the country get the best care possible to give children a strong start in life.

Let’s get mothers and newborns off to a strong start.  Learn more about Strong Start and what you can do to reduce the rate of premature and preterm births.

Information on Implementation of the Physician Payments Sunshine Act

On December 19, 2011, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule implementing the Physician Payments Sunshine Act, which was included as section 6002 of the Affordable Care Act of 2010.  This provision will provide important transparency in requiring reporting of payments or gifts to physicians, and physician ownership and investment interests.  During the 60 day comment period, CMS received over 300 comments from a wide range of stakeholders.

CMS is committed to addressing the valuable input received during the comment period, and to ensuring the accuracy of the data collected.  In order to provide time for organizations to prepare for data submission and to sufficiently address the important input we received during the rulemaking process, CMS will not require data collection by applicable manufacturers and applicable group purchasing organizations before January 1, 2013.

CMS intends to release the final rule later this year.  This timing will provide CMS with additional time to address operational and implementation issues in a thoughtful manner, and the ability to ensure the accuracy of the data that is collected.


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