Medicare Competitive Bidding Program Cuts Spending Without Impacting COPD Outcomes

While the Medicare Competitive Bidding Program (CBP) was associated with differentially lower spending, it did not result in significant changes in oxygen use or clinical outcomes among beneficiaries with chronic obstructive pulmonary disease (COPD), according to a recent study in JAMA Internal Medicine.¹

Supplemental oxygen prescribing has declined by 27% to 28% among Medicare beneficiaries using the most common delivery modalities.² One proposed explanation for this is the Medicare CBP.¹

Introduced as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the CBP aims to reduce spending across all durable medical equipment (DME) by replacing the traditional fee schedule with a bidding system. Therefore, it awards contracts to suppliers offering the most competitive prices. It was implemented by metropolitan area starting in 2011.

Professional societies and patient groups have raised concerns that the CBP’s lower reimbursement rates have negatively impacted the quality and accessibility of supplemental oxygen therapy. In response, the Supplemental Oxygen Access Reform (SOAR) Act was introduced earlier this year; it seeks to remove supplemental oxygen from the CBP. By returning to a fee schedule and setting higher reimbursement rates, the bill aims to incentivize suppliers to provide more oxygen with better service quality.

The researchers conducted a policy analysis to investigate this controversy, examining the association between the CBP’s implementation in 2011 and 2013 with supplemental oxygen use, spending, and clinical outcomes among Medicare beneficiaries with COPD; they focused on new oxygen prescriptions and the discontinuation of previously prescribed oxygen over a 6-month period.

Secondary outcomes included switches between oxygen types, all-cause mortality, all-cause unplanned hospitalizations, COPD hospitalizations, and total spending. They performed the analysis using the Callaway-Sant'Anna method, a dynamic difference-in-differences (DID) model for policies with staggered implementation.

While the Medicare Competitive Bidding Program reduced spending, it did not significantly impact supplemental oxygen use or clinical outcomes among patients with chronic obstructive pulmonary disease.

Image Credit: Doodeez - stock.adobe.com

The Medicare CBP was implemented in a staggered fashion based on geography, with 9 competitive bidding areas on January 1, 2011, and an additional 100 on July 1, 2013. Therefore, the unit of analysis was the beneficiary-half-year period, or the 6 months from January to June or July to December each year to align with the CBP implementation dates.

The researchers assigned beneficiaries to cohorts based on their residential zip codes, comparing those in CBP-implemented areas to those in non- or never-implemented areas. However, the study ended on December 31, 2015, since nationwide CBP pricing began on January 1, 2016, eliminating the control group.

The study population included Medicare fee-for-service beneficiaries with COPD aged 65 to 100 years. The researchers required eligible beneficiaries to have continuous enrollment for a 6-month observation period and a 12-month lookback period for risk adjustment. They obtained data spanning 2009 to 2015 from various Medicare fee-for-service files, including inpatient, DME, Master Beneficiary Summary File (MBSF), and the MBSF Chronic Conditions Warehouse segment.

The researchers identified 5,753,308 Medicare beneficiaries with COPD over the study period, with a mean (standard deviation [SD]) age of 79.2 (8.4) years. Of the beneficiaries, 25.9% had at least one 6-month period of supplemental oxygen use.

Compared with the non-CBP cohort, beneficiaries with COPD living in CBP implementation areas were more likely to be female (56.6% vs 53.3%), living in metropolitan areas (99.2% vs 48.2%), a race/ethnicity other than White (20.9% vs 10.2%), and living in a zip code with a higher per-capita median income (mean [SD], $49,245.10 [$14,969.30] vs $38,120.20 [$8443.84]).

The percentage of all beneficiaries with COPD receiving a new oxygen prescription decreased from 3.3% in the second half of 2009 to 2.5% in the second half of 2015, accounting for a 22.8% relative decline. Similarly, 12.4% of beneficiaries discontinued supplemental oxygen in the second half of 2009 vs 13.9% in the second half of 2015; there was an 11.8% relative increase in discontinuations.

Consequently, the researchers determined that CBP implementation in the 2011 and 2013 cohorts was not associated with a differential change in the probability of a new oxygen prescription (DID estimate, –0.19 percentage points [PP]; 95% CI, –2.45 to 2.08) or the discontinuation of an existing prescription (DID estimate, –0.77 PP; 95% CI, –8.15 to 6.60).

Similarly, differential changes were not observed in oxygen switches (DID estimate, –0.04 PP; 95% CI, –0.44 to 0.37), all-cause mortality (DID estimate, 0.16 PP; 95% CI, –7.52 to 7.84), COPD hospitalizations (DID estimate, –0.04 PP; 95% CI, –2.57 to 2.48) or all-cause unplanned hospitalizations (DID estimate, –0.20 PP; 95% CI, –10.94 to 10.53). However, the researchers observed differential changes in total spending, as the Medicare CBP helped reduce costs (DID estimate, –$326.22; 95% CI, –$434.76 to –$217.68).

“This study did not find evidence supporting ongoing policy efforts to remove supplemental oxygen from the CBP,” the authors wrote.

The researchers acknowledged their limitations, one being that they only evaluated patients with COPD. Therefore, they do not know how the CBP impacted outcomes among those with pulmonary hypertension or interstitial lung disease, who often have greater oxygen needs. Considering these limitations, the researchers suggested areas for further research.

“Factors other than the CBP should be evaluated as potential causes for changes in oxygen prescribing over time,” the authors concluded. “Further research is needed to evaluate the 2016 implementation of the CBP and outcomes in other chronic lung diseases.

References

1. Duan KI, Obara E, Wong ES, et al. Supplemental oxygen use, outcomes, and spending in patients With COPD in the Medicare Competitive Bidding Program. JAMA Intern Med. doi:10.1001/jamainternmed.2024.5738
2. Duan KI, Wong ES, Liao JM, Sabbatini AK, Au DH. Long-term trends in home respiratory medical equipment among US Medicare Patients, 2013-2019. Am J Respir Crit Care Med. 2022;206(4):509-511. doi:10.1164/rccm.202202-0238LE