New program will cut payment for durable medical equipment in Medicare test program

In California, beginning Jan. 1, "a new Medicare program will slash by 30 percent the prices it will pay for certain wheelchairs, oxygen concentrators and other medical devices in San Bernardino and Riverside counties, lowering costs for both local Medicare recipients and the American taxpayer," Redland Daily Facts reports. The savings are anticipated to total $17 billion over 10 years and "are the kind of dramatic gains needed to counteract the relentless, double-digit increases in health costs, Medicare officials say. The federal agency is driving down the prices of expensive medical equipment by requiring companies that stock those devices to bid for the right to sell them to Medicare recipients. The bidding is expected to fix two serious flaws in the current Medicare supply chain — inflated prices and rampant fraud." Some say seniors will also benefit from lower costs — they typically pay 20 percent of the cost of such equipment — but suppliers and "trade groups predict that lower prices will doom many family-owned supply firms and undermine care to homebound elderly patients who need their wheelchairs tuned up and oxygen canisters delivered" (Rodriguez and Schoch, 10/9).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.