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Money-Saving Changes Come to Medicare

Expanded competitive bidding program will trim costs for beneficiaries and taxpayers

En español l Medicare is ready for some big changes.

On July 1, the government expanded its competitive bidding program for durable medical equipment, prosthetics, orthotics and supplies — everything from diabetic test strips and back braces to mattresses and motorized scooters — to 100 metropolitan areas nationwide.

health care equipment medicare beneficiary bid bidding system effect savings save hands money (iStockPhoto)


Reap huge savings with Medicare's competitive bidding program.

See also: Medicare Starter Kit

The new program, which aims to crack down on waste and fraud, launched two years ago as a pilot project in nine metropolitan areas. It replaces fee schedules that sometimes have forced Medicare to pay three to four times what commercial insurers pay for the same equipment and supplies.

The government estimates that it will save taxpayers $25.7 billion over 10 years and beneficiaries an additional $17.1 billion in out-of-pocket costs.

Here are answers to questions you may have about how the program could affect you.

How can I find out if I will be affected?

Call 800-633-4227 or visit and enter your ZIP code. You'll then know whether you live in one of the 100 competitive bidding areas and which types of equipment and supplies are covered.

Will I have to use one of the new Medicare contract suppliers or can I continue with my current supplier?

If you live in a competitive bidding area, you'll generally need to use a contract supplier, so check to see if your current supplier has a contract under the new program. There's an exception for oxygen, oxygen equipment and certain medical equipment that's rented on a month-to-month basis, in which case your current supplier can participate on a "grandfathered" basis until the rental period ends.

I'm a diabetic. Does the new program affect how Medicare pays for test strips and other supplies I need?

Yes, you'll have to use a Medicare national mail-order contract supplier to have your diabetes testing supplies delivered to your home — even if you don't live in a competitive bidding area.

You can also get the supplies from a store or pharmacy that accepts "Medicare assignment." This means that the store will accept the Medicare-approved amount as payment in full and that you cannot be charged more than a 20 percent copay (after you meet your annual deductible). A Medicare contract supplier can't charge you more than that for the equipment or supplies included in the competitive bidding program.

What about equipment and supplies I get from my doctor or hospital?

Medicare will pay for certain "medically necessary" items (a walker or folding wheelchair, for example) furnished by your doctor or other health care provider during an office visit, or furnished by a hospital before you are discharged.

What if I'm in a Medicare Advantage Plan?

The competitive bidding program applies only to traditional Medicare. If you're enrolled in a Medicare Advantage Plan, it will notify you if your supplier changes.

What if I need a specific brand or form of equipment or supplies?

Your doctor must prescribe the specific brand or form in writing and note in your medical record why it's needed. Then, a Medicare contract supplier is required to furnish that brand or form, help you find another contract supplier that can furnish it, or work with your doctor to find a safe and effective alternative.

What happens if I need to get medical equipment or supplies when I'm away from home?

If you are in a competitive bidding area while away from home, you'll need to use a Medicare contract supplier for any covered equipment or supplies, and your out-of-pocket costs will be the same as when you are home. If you're not in a competitive bidding area, you may use any Medicare-approved supplier.

Bill Hogan is a features editor for AARP Media.

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