Guest Post: Victor Walsh on Competitive Bidding

victor-a-walshDPAC shares stories about access and the issues patients have encountered in getting the diabetes supplies, medications, and services they need. Dr. Victor Walsh, Ph.D and PWD (person with diabetes),  gives his thoughts and comments about the Medicare Competitive Bidding program for diabetes testing supplies by sharing his story.

On the morning of January 21, 2014, I went into insulin shock and lost consciousness on the front porch of my home in Santa Cruz, CA. A passerby called 911 and a medic alert team revived me intravenously with glucose and then took me to nearby Dignity Hospital.

Several months later, I contacted the Centers for Medicare and Medicaid Services (CMS) in San Francisco. In my email to David Sayen, the Regional Administrator, I mentioned that this episode could have been prevented, “if I had coverage for more test strips to check my blood glucose.” I also noted that I had a recent second medical emergency, in which I went into insulin shock asleep, but somehow woke up. Unable to call anyone or talk, I crawled into the kitchen and revived myself by licking up apple juice that I had spilled on the floor.

Competitive Bidding Program (CBP)

What is happening to me and other insulin-treated diabetics is an unfolding disaster that has eluded the media and public awareness. In 2011, Medicare launched its Competitive Bidding Program (CBP) as required by the 2003 Medicare Modernization Act (MMA) to reduce costs, prevent waste and streamline acquisition of medical equipment and supplies for Part B beneficiaries.

Under CBP, coverage of test strips is limited to 300 over three months or three per day. Additional strips may be covered provided the treating physician can justify their usage as “medically necessary and reasonable.” The physician must provide the beneficiary’s testing logs to the supplier to confirm a higher frequency in use. The process is unwieldy and prone to error; burying physicians in paper work that detracts from time with patients.

To learn more about this program, click the image.

Claims and appeals on my behalf have been repeatedly denied resulting in lapses of coverage and mounting out-of-pocket expenses, including for continuous glucose meters, transmitters, sensors and other diabetic equipment that Medicare does not cover. Many seniors simply do not understand how CBP works or are unable to record logs and thus slip through the safety net.

Diabetes is expensive to treat, especially in a patient’s later years when ongoing difficulty to control glucose levels often leads to other serious complications. In 2014, 28% of Medicare’s beneficiaries had been diagnosed with diabetes. Almost one in every three Medicare dollars was spent on their care.

Controlling Fraud And Waste, But At What Cost?

Medicare’s unprecedented growth over the past decade has triggered an epidemic of fraud, abuse and improper claim payments amounting to an estimated $60 billion now. In 2014, improper payment for durable medical equipment and supplies totaled $5.1 billion. This includes big-ticket items like wheelchairs, respirators and oxygen concentrators, as well as blood glucose test strips.

Clearly, there is a compelling need to control fraud and waste, but CBP’s focus on documentation is not the right approach, especially as it relates to cases like mine. It creates real barriers to attaining necessary testing supplies and is dinosaurian in a digital age.

Hypoglycemia and CBP

Furthermore, CMS’s staff does not understand the life-threatening consequences of a diabetic condition called hypoglycemia unawareness—the inability to recognize the onset of rapidly dropping blood glucose levels. Not all diabetics experience it, but older, long-term, insulin-treated diabetics like me are prime candidates.

Hypoglycemia occurs because continual and erratic blood glucoses eventually incapacitate the brain’s glucose-sensing neurons from transmitting symptoms. The brain does not store glucose, but draws it directly from the bloodstream. Rapidly declining glucose levels seriously affect its cognitive, locomotive and visual functions and, if untreated, lead to convulsions, comas, brain damage or death.  

Limiting coverage of diabetics vulnerable to hypoglycemia to three strips a day is not only foolish but irresponsible and dangerous. They must check their blood sugar before and after every meal and always at bedtime; otherwise, they may not wake up. Ask any endocrinologist.

Restricting Access

Another problem is the ongoing difficulty to acquire essential testing supplies. In June, my mail-order supplier CCS Medical withdrew from supplying branded test strips because CMS cut the reimbursement rate by 20%. I never heard from CMS. It took me over a month to find another supplier  that carried One Touch Ultra Blue strips that I use for my blood glucose meter. Service ended abruptly severally weeks later when the mail order company stopped carrying them. There is only one mail order supplier in my area that still carries this brand. As for local pharmacies, only one accepts Medicare beneficiaries whose test strip usage exceeds the local coverage limit of three per day.

Jeopardizing Safety

Such disruptions and delays, along with long wait times for follow-up calls, jeopardize patient safety. I have repeatedly called or emailed CMS staff in San Francisco asking questions about how the mail-order suppliers are monitored, but answers almost always focused on coverage requirements, not supplier service, and now I know why.

First, beneficiaries are required under law to order supplies and equipment from either a CBP mail-order supplier or local pharmacy contracted by Medicare. The contracts differ in one critical respect: Pharmacies are not part of CBP and thus have the option to bill beneficiaries, while the small number of mail-order suppliers must accept as full payment the amount approved by Medicare for each item. Reimbursements are substantially less than Medicare’s fees for services, but the trade-off is that the mail-order suppliers gain a monopoly on a burgeoning market of millions of new Medicare customers.

Second, the law exempts CBP from any safety monitoring or oversight restrictions. Given the low, volatile profit margin, this has prompted mail-order suppliers to reduce overhead. The new rate of reimbursement for glucose test strips is only $6.65 per vial of fifty. As a result, mail-order channels have limited the availability of branded test strips needed by diabetics. The outcome has been a disaster for them and probably other Part B beneficiaries.   

In April 2016, the American Diabetes Association (ADA) published a report in its journal Diabetes Care that is highly critical of CBP’s impact on the safety of insulin-treated diabetics and to access to testing supplies. In the program’s nine pilot test markets, the proportion of insulin-treated diabetics that switched from full to partial or no testing supplies increased by 58% compared to a 14% decrease in non-test sites.

The report found that death and hospitalization rates of diabetics in those markets were nearly twice those of Medicare’s other insulin-dependent beneficiaries. Despite the report’s recommendation to suspend the program immediately, it was expanded to the entire nation in July 2013.

You can act now to tell Congress this must stop by clicking this link.

Programs to reduce costs, though necessary, should never be pursued if they risk patient safety. CMS has never explained how or if it assessed the risk to diabetic recipients before launching CBP and how this program is “reasonable and necessary” in accordance with the Social Security Act of 1965 that it is charged to uphold and administer.

Living with a chronic, incurable disease can be overwhelming and life-threatening. It demands rigorous adherence to a daily regimen and vigilant self-monitoring. This is my responsibility, but it is Medicare’s responsibility to provide the essential tools to manage it.  For me this means CBP should not invalidate my right to manage my health as prescribed by my endocrinologist. In this capacity, CBP has failed miserably and must be repealed by the next Congress in order to prevent further loss of human life.

Diagnosed 54 years ago as a type 1 diabetic, Dr. Victor A. Walsh, Ph.D, is a retired California State Parks historian.  Now a Medicare Part B beneficiary, he is concerned about coverage and management issues involving diabetic testing supplies. His historical and literary essays have appeared in the Christian Science Monitor, Rosebud, California History, Journal of the West, Travel Thru History, San Antonio Express-News, Irish America, Literary Traveler, among other publications.

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