DIT\RT\11::\T ( >F HI:.\LTII \:\!) Hl "\1 .\:\ SER\"[(;E'-, 
OFFICE OF INSPECTOR GENERAL 
\\\,l ll'\t , I IJ'\. IH  ~ l f.'HI 
 JUN 1 32014 
TO: 	 Marilyn Tavenner 
Administrator 
Centers for Medicare & Medicaid Services 
FROM:  Brian P. Ritchie 
Acting Deputy Inspector General 
for Evaluation and Inspections 
SUBJECT: 	 Memorandum Rep011:  Medicare Market Shares ofMail Order Diab etes Test 
Strips From July-September 2013 , OEI -04 -13-00680 
This report provides information on the types of mail order diabetes test strips associated with 
Medicare claims for the 3-month period of July to September 2013.  Section 154(d)(3)(B) of the 
Medicare Improvements for Patients and Providers Act of2008 (MIPPA) requires the Office of 
Inspector General (OIG) to complete a study to determine market shares of diabetes test strips 
before each round of competitive bidding following Round 1 of the Competitive Bidding 
Program . This report fulfills the MIPP A requirement for the pending third round of competitive 
bidding; a 20 I 0 OIG report fulfilled the MIPPA requirement to complete a study determining 
market shares of diabetes test strips before 2011. 
SUMMARY 
Medicare covers diabetes test strips provided by mail order suppliers and local pharmacies or 
supplier storefronts.  The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA) requires the Centers for Medicare & Medicaid Services (CMS) to phase in, with 
several rounds of bidding, a Competitive Bidding Program for durable medical equipment, 
prosthetics, orthotics, and supplies (DMEPOS) . Under this program , suppliers compete to 
become Medicare contract suppliers for selected DMEPOS items.  The payment amounts 
resulting from the competition replace the Medicare fee-schedule amounts for these items. 
The Competitive Bidding Program includes diabetes test strips provided by mail order but does 
not include diabetes test strips purchased at a local pharmacy or supplier storefront 
(i.e., non-mail order) .  Under the program , " mail order" includes diabetes test strip s shipped or 
delivered to the beneficiary's home , regardless of the method of delivery .  Page 2  Marilyn Tavenner 
Non-mail order diabetes test strips are those that a beneficiary picks up in person at a local 
pharmacy or supplier storefront.  The American Taxpayer Relief Act of 2012 (ATRA) 
established equal Medicare payment amounts for mail order and non-mail order diabetes test 
strips purchased after the implementation of a national competition for mail order diabetes 
testing supplies (hereinafter referred to as the National Mail Order Program).1  CMS 
implemented the National Mail Order Program on July 1, 2013. 
  
MIPPA prohibits CMS from awarding Competitive Bidding Program contracts for mail order 
diabetes test strips to suppliers that do not demonstrate that their bid covers at least 50 percent, 
by volume, of all types of diabetes test strips.  (This is referred to as the MIPPA 50-percent 
requirement.)  Further, MIPPA section 154(d)(3)(B) requires OIG to complete a study to 
determine market shares of diabetes test strips in the Competitive Bidding Program before each 
round of competitive bidding following Round 1.        
 
We determined the Medicare market shares for diabetes test strip types associated with a random  
sample of Medicare claims for the 3-month period of July to September 2013.  Our sample of 
1,210 claims was drawn from a population of approximately 505,000 claims for mail order 
diabetes test strips provided to beneficiaries during this period.  To estimate the Medicare market 
shares, we projected our sample data to the population of mail order diabetes test strips.   
 
We found that 22 suppliers submitted  at least 43 types of mail order diabetes test strips for the 
3-month period of July to September 2013.  Two types of diabetes test strips accounted for 
approximately 45 percent of the Medicare mail order market share.  Three types of diabetes test 
strips accounted for 59 percent of the Medicare mail order market share and 10 types accounted 
for 90 percent. CMS may consider these data when determining whether subsequent rounds of 
suppliers mail order diabetes test strip bids comply with the MIPPA 50-percent requirement.  
 
BACKGROUND 
 
Diabetes is a chronic disease in which a person has a high level of blood sugar (i.e., glucose) 
because either the body does not produce enough insulin, or cells do not respond properly to the 
insulin that the body does produce.2  Diabetes may be managed through a variety of methods, 
including healthy eating, physical activity, and insulin injections.3  If people with diabetes do not 
properly manage their glucose levels, medical complications (e.g., hypoglycemia, cardiovascular 
disease, or renal disease) may occur.   
 
Diabetes disproportionately affects older adults.  Approximately 27 percent of individuals ages 
65 and older in the United States report having diabetes, whereas the reported percentage in the 
overall population is 8 percent.4  Medicare covers services and testing supplies to help 
beneficiaries with diabetes manage the condition. 
                                                 
1  ATRA, P.L. No. 112-240  636 (adding  Social Security Act,  1834(a)(1)(H), 42 U.S.C.  1395m(a)(1)(H)). 
   
2  National Institutes of Health (NIH), Diabetes Overview:  What is Diabetes?   Accessed at 

http://www.diabetes.niddk.nih.gov/dm/pubs/overview/index.htm on October 11, 2013.  

3 NIH,  Diabetes Overview:  How is Diabetes Managed?   Accessed at 

http://www.diabetes.niddk.nih.gov/dm/pubs/overview/index.htm#managed on  October 11, 2013.  

4 The Centers for Disease Control and Prevention.  Diabetes Self Management Overview. Accessed at 

http://www.cdc.gov/diabetes/pubs/pdf/ndfs_2011.pdf on October 3, 2013. 
  
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 3  Marilyn Tavenner 
A person with diabetes may use a hand-held meter to test the concentration of glucose in his or 
her blood. To do so, the individual inserts a diabetes test strip into the meter.  A diabetes test 
strip is a small, thin, one-time-use piece of plastic on which a sample of blood is placed after 
pricking the skin with a lancet. The meters reading of an individuals glucose level provides the 
information required for that person to manage his or her diabetes.  People with diabetes may 
need to perform glucose tests several times a day to assist them in maintaining appropriate 
glucose levels. 
 
To be eligible for Medicare coverage of diabetes test strips and other diabetes supplies, Medicare 
beneficiaries with diabetes must be under the treatment of a physician for the condition.5  The 
physician must prescribe the frequency of use for diabetes test strips.6  Because some  
beneficiaries should test their glucose more frequently than others, the number of boxes of 
diabetes test strips per Medicare claim varies.7  Each box contains 50 strips. 
 
Suppliers submit one Medicare claim for a beneficiarys supply of diabetes test strips for up to 
3 months at a time.  Each claim indicates the number of boxes provided to the beneficiary for the 
applicable time period.  Suppliers submit claims using Healthcare Common Procedure Coding 
System (HCPCS) codes to receive Medicare reimbursement.  Medicare claims for diabetes test 
strips are billed using HCPCS code A4253.  For diabetes test strips provided by mail order, the 
HCPCS code A4253 must use the KL modifier (A4253 KL).8     
 
Medicare beneficiaries may purchase their diabetes test strips via mail order from suppliers in the 
Competitive Bidding Program or via non-mail order from local pharmacies or supplier 
storefronts. Mail order applies to diabetes test strips shipped or delivered to a beneficiarys 
residence.9  For both mail order and non-mail order, Medicare pays 80 percent of allowed 
charges for diabetes test strips and the beneficiary is responsible for the remaining 20 percent.   
 
The Competitive Bidding Program and Diabetes Test Strips  
MMA required CMS to phase in, with several rounds of bidding, the Competitive Bidding 
Program for selected DMEPOS items, including mail order diabetes test strips.10  The selected 
DMEPOS items are generally high-cost and high-volume items that have a high savings potential 
                                                 
5 Other diabetes testing supplies may include  batteries and control solution.  

6 Medicare Local Coverage Determinations (LCDs) for Glucose Monitors (L11530, L27231, L11520, and L196 for
  
Durable Medical Equipment Medicare Administrative Contractor  Jurisdictions  A, B, C, and D respectively).  
 
7 CMS, MLN Matters Number SE1008:  An  Overview of Medicare Covered  Diabetes Supplies and Services. 

Accessed at http://www.cms.gov/MLNMattersArticles/downloads/SE1008.pdf  on October 25, 2013.  Medicare 

covers up to 100 testing strips per month (i.e., two 50-count  boxes)  for insulin-dependent  beneficiaries with diabetes
  
and up to  100 testing strips every 3 months for noninsulin-dependent beneficiaries with  diabetes.  Medicare allows 

additional testing strips if deemed medically necessary and documented in physician records.  Medicare LCDs for 

Glucose Monitors (L11530, L27231, L11520, and  L196 for  Durable Medical Equipment Medicare Administrative 

Contractor Jurisdictions A, B, C, and D respectively).   

8 Medicare Claims Processing  Manual, Pub.  No.  100-04, ch. 36,   20.5.4.1 and 50.6.  A  modifier is a code on a 

Medicare claim  that further describes the services performed or supplies provided to a beneficiary.
 
9 42 C.F.R.   414.402  (defining mail order item). 

10 MMA, P.L. No. 108-173    302(b)(1)  (amending Social Security Act,  1847, 42  U.S.C.   1395w-3). 

Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 4  Marilyn Tavenner 
under the Competitive Bidding Program.11  CMS uses bids submitted by DMEPOS suppliers to 
determine the payment amounts under the program.  Bids are evaluated based on suppliers 
eligibility, their financial stability, and the bid price.12  Contracts are awarded to the suppliers 
that generally offer lower prices and meet applicable quality and financial standards.13  
 
MIPPA also requires mail order suppliers to demonstrate in their bids that they provide at least 
50 percent, by volume, of all types of diabetes test strips.14  This 50-percent requirement is 
intended to ensure that most beneficiaries can receive their preferred type of diabetes test strips.  
Further, the MIPPA section 154(d)(3)(B) requires the OIG to complete a study to determine 
market shares of mail order diabetes test strips in the Competitive Bidding Program before each 
round of bidding following Round 1.15    
 
Round 1 of the Competitive Bidding Program. Before 2011, Medicare reimbursed all diabetes 
test strips suppliers on the basis of fee-schedule amounts, which were updated annually and 
varied by State.  In January 2011, CMS implemented Round 1 of its Competitive Bidding 
Program for selected DMEPOS in nine Competitive Bidding Areas (CBAs).16  Competitive 
bidding payment amounts replaced the fee schedule amounts for mail order diabetes test strips in  
                                                 
11 CMS, General Overview of the Final Rule for Competitive Acquisition for Certain  Durable Medical Equipment, 
Prosthetics, Orthotics, and Supplies. Accessed at https://www.cms.gov/DMEPOSCompetitiveBid/Downloads/ 
DMEPOSRegSumm.pdf on October 4, 2013; 73 Fed. Reg.  17992, 18010 (Apr. 10, 2007).  
12 Palmetto GBA, Overview of the DMEPOS  Competitive Bidding Program.  Accessed at 
http://www.dmecompetitivebid.com/palmetto/cbic.nsf/vMasterDID/79NTSG0132 on  October 16, 2013.  
13 Palmetto GBA, How a Bid is Evaluated. Accessed at http://www.dmecompetitivebid.com/Palmetto/cbicrd2.nsf/  
files/Webcast_Transcript_Bid_Evaluation.pdf/$File/Webcast_Transcript_Bid_Evaluation.pdf  on February 24, 2014;  
CMS, Medicare Claims Processing Manual,  Pub.  No.  100-04,  ch. 36,  40.1.  The payment  amount for an item  
furnished  under the competitive  bidding  program is equal to the median of the bids submitted by qualified suppliers 
whose composite bids are equal to or  below the pivotal bid for that product category.   42 CFR   414.416(b).  The 
pivotal bid is the lowest composite bid based  on bids submitted by suppliers that includes a sufficient number of 
suppliers to meet beneficiary  demand for the items in a product category.  42 CFR   414.402.    
14 Specifically, MIPPA stipulates that suppliers provide at least 50 percent (or such  higher  percentage as the 
Secretary may specify) of all diabetes test strips in the aggregate and taking into account volume for the different 
products.  MIPPA  154(d)(3)(A).  The 50-percent requirement did  not apply to suppliers  bids in Round 1 of the 
Competitive Bidding Program. 
15  MIPPA,  P.L. No. 110-275  154(d)(3)(B)  (adding  Social Security Act,  1847(b)(10)(B), 42  U.S.C.  
 1395w-3(b)(10)(B)).   
16  MMA, P.L.  No. 108-173  302(b)(1), as  amended by  MIPPA,  P.  L. No. 110-275  154.   CBAs are defined by  
specific ZIP Codes related to Metropolitan Statistical Areas (MSAs).  CMS, Competitive Bidding Areas. Accessed 
at http://www.dmecompetitivebid.com/Palmetto/Cbic.nsf/files/Fact_Sheet_Competitive_Bidding_Areas.pdf/  
$File/Fact_Sheet_Competitive_Bidding_Areas.pdf on  November  5,  2013.  Selected CBAs in Round 1 were  
CharlotteGastoniaConcord (North Carolina and South Carolina), CincinnatiMiddletown (Ohio, Kentucky, and 
Indiana), ClevelandElyriaMentor (Ohio), DallasFort WorthArlington (Texas), Kansas City (Missouri and 
Kansas), MiamiFort LauderdalePompano Beach (Florida), OrlandoKissimmee (Florida), Pittsburgh 
(Pennsylvania), and RiversideSan BernardinoOntario  (California).  
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 5  Marilyn Tavenner 
these CBAs. Mail order diabetes test strips were included in Round 1 of the Competitive 
Bidding Program, but non-mail order test strips were not.17    
 
As a result of Round 1 of the Competitive Bidding Program, the average Medicare payment in 
2011 for mail order diabetes test strips provided to beneficiaries in CBAs was $14.62 per  
50-count box. In contrast, the national average Medicare payment for mail order diabetes test 
strips in non-CBAs (i.e., areas that were not a part of the Competitive Bidding Program) was 
$32.47, and the national average payment for non-mail order diabetes test strips was $37.67.  See 
Appendix A for more information about Round 1 of the Competitive Bidding Program. 
 
Round 2 of the Competitive Bidding Program and the National Mail Order Program. MIPPA 
required competition for Round 2 of the Competitive Bidding Program to occur in 2011 in  
70 additional CBAs.18  The Patient Protection and Affordable Care Act of 2010 further expanded 
the number of CBAs to 100 and required CMS to expand the DMEPOS competitive bidding 
program nationwide or to adjust payments to suppliers using competitively bid rates by 2016.19    
 
MIPPA authorized a National Mail Order Program for mail order diabetes testing supplies, 
expanding the Competitive Bidding Program from the nine CBAs in Round 1 to all U.S. States 
and Territories.  Additionally, ATRA established equal Medicare payment amounts for mail 
order and non-mail order diabetes test strips provided after implementation of the National Mail 
Order Program.20  CMS implemented both the National Mail Order Program and Round 2 of the 
Competitive Bidding Program on July 1, 2013.21  Thus, under Round 2 of the Competitive 
Bidding Program, both mail order and non-mail order diabetes test strips are reimbursed at the 
same competitive bidding payment rate, $10.41 per 50-count box.   
 
Related OIG Work  
This report fulfills OIGs MIPPA requirement for the pending third round of competitive bidding 
and is part of a body of work on the Medicare market share of diabetes test strips.  CMS 
requested two additional reportsone that determines the market share of diabetes test strips for 
the 3-month period of April to June 2013, immediately preceding the National Mail Order 
                                                 
17 During Round 1  of the Competitive Bidding Program,  mail order diabetes test strips were defined as items ordered  
remotely (that is, by telephone, email, Internet, or mail) and delivered to a  beneficiarys residence by common 
carriers (for example, U.S. Postal Service, Federal Express, United Parcel  Service).  It  did not include items obtained 
by beneficiaries from local storefronts.  After Round 1 of the Competitive Bidding  Program, CMS expanded the 
definition  of mail order to include any item (for example, diabetes testing supplies) shipped  or delivered to the 
beneficiarys home, regardless of the method of delivery.  75 Fed. Reg.  73170, 73570, and 73623  (Nov. 29, 2010)  
(revising the definition of mail order item in 42 CFR 414.402 and explaining  why the new  definition  will not  
apply to Round  1). 
18  MIPPA,  P.L. No. 110-275  154(d)(3)(A). 
19 CMS, DMEPOS Competitive Bidding Program. Accessed at http://www.cms.gov/Medicare/Medicare-Fee-for-
Service-Payment/DMEPOSCompetitiveBid/  on November 18, 2013.  MIPPA allows  for MSAs that have  
populations over 8 million to  be subdivided into multiple CBAs.  Most Round  2 MSAs contain only one CBA; 
however, the three largest MSAsChicago, Los Angeles, and New Yorkare subdivided into multiple CBAs. 
20  ATRA, P.L. No. 112-240  636 (adding  Social Security Act,  1834(a)(1)(H), 42 U.S.C.  1395m(a)(1)(H)).    
21 CMS, Contract Suppliers Selected Under Medicare Competitive Bidding  Program. Accessed at 
http://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2013-Press-releases-items/2013-04-092.html  
on February  19, 2014.   Eighteen contracts were awarded to  suppliers to  provide diabetes testing supplies through the 
National Mail Order Program.    
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 6  Marilyn Tavenner 
Program, and another that determines the market share of diabetes test strips for the 3-month 
period of October to December 2013, several months after the National Mail Order Program  
began.22  CMS requested these additional reports for informational purposes and to evaluate the 
impact of competitive bidding on brand selection.  
 
Additionally, in 2010, OIG published the first report to fulfill its MIPPA requirement to 
complete a study determining market shares of diabetes test strips before 2011.  OIG found that 
171 suppliers submitted claims for at least 75 types of mail order diabetes test strips for the 
3-month period of October to December 2009.23  Of these strips, two types accounted for 
approximately 26 percent of the Medicare mail order market share, 7 types accounted for 
approximately 50 percent of the Medicare mail order market share, and 19 types accounted for 
approximately 81 percent.   
 
METHODOLOGY 
 
Data Collection  
We identified the population of Medicare claims for mail order diabetes test strips from CMSs 
National Claims History file with a beginning date of service from July through September 2013.  
In this file, there were 504,916 claims submitted by 80 suppliers.  We then selected a simple 
random sample of 1,210 of these 504,916 claims within our date-of-service range.  To identify 
the beneficiaries associated with each claim  in our sample, we matched them with the CMS 
Beneficiary Enrollment Database.   
 
We sent a documentation request to 22 suppliers associated with the claims in our sample.  For 
each claim, we asked the supplier to indicate the type (model and manufacturer) of diabetes test 
strips that it provided to the Medicare beneficiary associated with the claim and to submit 
relevant documentation (e.g., packing slips, invoices for the strips).24  We received responses 
from 22 suppliers associated with 1,190 claims  in our sample, a 98-percent response rate.  
 
Data Analysis 
We reviewed claims data and supplier documentation and responses to determine the quantity 
and type of mail order diabetes test strips associated with each claim in our sample.  The 
1,190 claims each covered from 1 to 19 boxes of strips, and data for these claims provide 
information for a total of 4,656 such boxes.25  
 
We categorized types of diabetes test strips by model and manufacturer.  We accounted for the 
volume of each type by determining the total number of 50-count boxes of each type of strip and 
the percentage across all boxes. We projected our sample data to the population of mail order 
diabetes test strips during our time period to estimate the Medicare market shares of mail order 
strip types. 
 
                                                 
22 OEI-04-13-00681 and  OEI-04-13-00682, in progress.  
   
23 OIG,  Medicare Market  Shares of Mail Order Diabetic Testing Strips (OEI-04-10-00130), December 2010. 

24  We contacted  suppliers up to  three times to obtain this information.  
  
25 Most claims (91 percent) were for 1 to 6 boxes. 
 
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 7  Marilyn Tavenner 
Limitations  
Suppliers have 1 year to submit claims to CMS.  Types of diabetes test strips associated with 
claims during our time period (i.e., with beginning dates of service in the months of July through 
September 2013) submitted after November 1, 2013the date we collected our Medicare 
claimsare not included. 
 
Standards 
This review was conducted in accordance with the Quality Standards for Inspections approved 
by the Council of the Inspectors General on Integrity and Efficiency. 
 
RESULTS  
 
Suppliers Submitted Claims for at Least 43 Types of Mail Order Diabetes Test Strips for 
the 3-Month Period of July to September 2013 
Twenty-two suppliers submitted at least 43 types of mail order diabetes test strips for the 
3-month period of July to September 2013.  Two types of diabetes test strips accounted for 
approximately 45 percent of the Medicare mail order market share.  Three types of diabetes test 
strips accounted for 59 percent of the Medicare mail order market share, and 10 types accounted 
for 90 percent. 
 
Table 1 lists the top 10 types of mail order diabetes test strips associated with Medicare claims  
for the 3-month period of July to September 2013.  See Appendix B for a complete alphabetical 
listing of all 43 types. Appendix B also provides the model, manufacturer, percentage of market 
share, and 95-percent confidence intervals for market share for each type of diabetes test strip. 
 
Table 1: Top 10 Mail Order Diabetes Test Strip Types Associated With Medicare Claims for the  
3-Month Period of July to September 2013  
Model  Manufacturer   Percentage of  
Market Share  
Prodigy AutoCode    Prodigy Diabetes Care   23.9%  
OneTouch Ultra Blue  LifeScan, Inc.  20.7%  
TRUEtest   Nipro Diagnostics, Inc.  14.8%  
Embrace  Omnis Health   8.5%  
Solus V2  BioSense Medical Devices  6.9%  
Advocate Redi-Code +  Diabetic Supply  of Suncoast, Inc.  4.6%  
Nova Max  Nova Biomedical  4.5%  
CONTOUR     Bayer HealthCare LLC   2.2%  
ACCU-CHEK Smartview*   Roche Diagnostics  2.1%  
ACCU-CHEK Aviva Plus  Roche Diagnostics  2.1% 
 Total   90.3%  
 
Source:  OIG analysis of  supplier documentation and Medicare claims containing HCPCS code  A4253 KL  for  
 
the 3-month period of July to September 2013. 

*This diabetes  test  strip may also be listed as  the ACCU-CHEK Nano Smartview. 
 
 
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 8  Marilyn Tavenner 
CONCLUSION 
 
Twenty-two suppliers submitted at least 43 types of mail order diabetes test strips for the  
3-month period of July to September 2013.  Two types of diabetes test strips accounted for 
approximately 45 percent of the Medicare mail order market share.  Three types of diabetes test 
strips accounted for 59 percent of the Medicare mail order market share, and 10 types accounted 
for 90 percent. CMS may choose to consider these data when determining whether subsequent 
rounds of suppliers mail order diabetes test strip bids comply with the MIPPA 50-percent 
requirement.   
 
This memorandum report is being issued directly in final form because it contains no 
recommendations.  If you have comments or questions about this report, please provide them  
within 60 days. Please refer to report number OEI-04-13-00680 in all correspondence. 
 
 
 
 
 
 
 
 
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 9  Marilyn Tavenner 
Appendix A 
 
Round 1 of the Competitive Bidding Program  
The MMA required CMS to phase in, with several rounds of bidding, a Competitive Bidding 
Program for DMEPOS.  Suppliers began submitting bids for Round 1 of the Competitive 
Bidding Program on May 15, 2007.  Contracts between CMS and suppliers became effective in 
selected CBAs on July 1, 2008.26    
 
Two weeks after the Round 1 contracts between CMS and suppliers became effective, Congress 
enacted MIPPA, which mandated the following changes to the Competitive Bidding Program:  
 
 	  the termination of contracts awarded to suppliers in Round 1;  
 
	   the requirement for CMS to repeat the Round 1 competition in 2009; and  
 
	   the institution of the MIPPA 50-percent requirement for mail order diabetes test strips in 
all rounds following the repeat of the Round 1 competition. (The repeat of the Round 1 
competition is known as the Round 1 Rebid.)27   
 
MIPPA also reduced the 2009 fee-schedule amounts by 9.5 percent for all DMEPOS included in 
Round 1 to offset the estimated cost savings lost by the delayed implementation of the 
Competitive Bidding Program.28  This reduction resulted in an average 2009 fee-schedule 
amount of $32.50 per 50-count box of mail order diabetes test strips. 
 
The Round 1 Rebid began in October 2009 and included the previous selected CBAs, except for 
San JuanCaguasGuaynabo (Puerto Rico). CMS announced the winning contract suppliers on 
November 3, 2010, and the suppliers began providing competitively bid DMEPOS items to 
beneficiaries in nine CBAs on January 1, 2011. As a result of the Round 1 Rebid, the average 
Medicare payment for 2011 mail order diabetes test strips provided to beneficiaries in CBAs was 
$14.62 per 50-count box. In contrast, the national average Medicare payment for mail order 
strips in non-CBAs was $32.47, and the national average payment for non-mail order diabetes 
test strips was $37.67. CMS also reported that the Competitive Bidding Program saved the 
Medicare program nearly $202.1 million in the first year of implementation.29  
 
                                                 
26 CMS, DMEPOS Competitive Bidding.  Accessed at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-

Payment/DMEPOSCompetitiveBid/index.html?redirect=/DMEPOSCompetitiveBid/01a_MSAs_and_CBAs.asp on 
 
November 5, 2013.  For a list  of CBAs in Round 1, see footnote 16. 
 
27 The 50-percent requirement did not apply to  suppliers  bids  in Round 1 or the Round  1 Rebid.  

28 CMS, MLN Matters Number MM6270. Fee Schedule Update for 2009 for Durable Medical Equipment, 

Prosthetics, Orthotics, and Supplies (DMEPOS). Accessed at http://www.cms.gov/Outreach-and-
Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM6270.pdf on November  20, 

2013.   

29 CMS, Competitive Bidding UpdateOne Year Implementation Update  April  17, 2012. Accessed at 
 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSCompetitiveBid/Downloads/ 
Competitive-Bidding-Update-One-Year-Implementation.pdf  on October 7, 2013.    
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 10  Marilyn Tavenner 
Appendix B 
 
Market Share Estimates for 43 Types of Mail Order Diabetes Test Strips, and the 
95-Percent Confidence Intervals for Those Estimates  
 
Market Share Estimates for 43 Types of Mail Order Diabetes Test Strips, and the 
95-Percent Confidence Intervals for Those Estimates  
Model   Manufacturer   Percentage  95-Percent  
of Market   Confidence Interval 
Share   for Market Share 
ACCU-CHEK Aviva  Roche Diagnostics  0.71%   0.470.95%  
ACCU-CHEK Aviva Plus  Roche Diagnostics  2.10%   1.692.52%  
ACCU-CHEK Compact  Roche Diagnostics  0.30%   0.140.46%  
ACCU-CHEK Compact  Roche Diagnostics  0.45%   0.260.64%  
Plus  
ACCU-CHEK  Roche Diagnostics  2.13%   1.712.54%  
Smartview*  
Advocate  Diabetic Supply  of  0.34%  0.180.51%  
Suncoast, Inc. 
Advocate Redi-Code  Diabetic Supply  of  0.17%  0.050.29%  
Suncoast, Inc. 
Advocate Redi-Code +  Diabetic Supply  of  4.64%  4.045.24%  
Suncoast, Inc. 
BREEZE 2   Bayer HealthCare LLC   0.37%   0.190.54%  
CONTOUR  Bayer HealthCare  LLC   2.19%   1.772.61%  
CONTOUR NEXT   Bayer HealthCare LLC   0.04%   0.000.10%  
CareSens N   i-Sens, Inc.  0.47%   0.280.67%  
Clever Chek   Simple Diagnostics  0.26%   0.110.40%  
Clever Choice Pro  Simple Diagnostics  0.04%   0.000.10%  
Clever Choice Voice  Simple Diagnostics     0.26%   0.110.40%  
EASYMAX V   Oak Tree International  0.30%  0.140.46%  
Holdings 
Easy Plus II   Home Aide Diagnostics  0.17%   0.050.29%  
Easy Step   Home Aide Diagnostics  0.17%   0.050.29%  
Easy  Talk  Home Aide Diagnostics  0.21%   0.080.35%  
Easy  Trak   Home Aide Diagnostics  0.34%   0.180.51%  
Element  Infopia USA  0.69%   0.450.92%  
Embrace  Omnis Health   8.46%   7.669.26%  
FreeStyle Lite   Abbot Diabetes Care   0.47%   0.280.67%  
              continued on next page  
 
 
 
               
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)  
  Page 11  Marilyn Tavenner 
Market Share Estimates for 43 Types of Mail Order Diabetes Test Strips, and the 
95-Percent Confidence Intervals for Those Estimates  (continued)  
Model   Manufacturer   Percentage  95-Percent 
of Market   Confidence Interval 
Share   for Market Share 
GE 100   Bionime USA Corporation   0.21%   0.080.35%  
GLUCOCARD  ARKRAY USA  0.13%   0.030.23%  
Expression  
GLUCOCARD Vital  ARKRAY  USA  0.56%   0.340.77%  
GlucoNavii  SD Biosensor, Inc.  0.15%   0.040.26%  
Gmate  Philosys, Inc.  0.26%   0.110.40%  
INFINITY  US Diagnostics  0.04%   0.000.10%  
Nova Max  Nova Biomedical  4.45%   3.855.04%  
On Call Plus  ACON Laboratories, Inc.  0.13%   0.030.23%  
On Call Vivid  ACON Laboratories, Inc.  0.09%   0.000.17%  
OneTouch Ultra 2  LifeScan, Inc.  0.04%   0.000.10%  
OneTouch Ultra Blue  LifeScan, Inc.  20.70%   19.5421.87%  
Perfect 3   Gluco Perfect   0.17%   0.050.29%  
Prodigy AutoCode   Prodigy Diabetes Care   23.88%   22.6625.11%  
GM100   Bionime USA Corporation   0.30%   0.140.46%  
Solo V2  BioSense Medical Devices  1.33%   1.001.66%  
SolusV2  BioSense Medical Devices  6.94%   6.217.67%  
TRUEbalance   Nipro Diagnostics, Inc.  0.09%   0.000.17%  
TRUEtest   Nipro Diagnostics, Inc.  14.84%   13.8215.86%  
TRUEtrack  Nipro Diagnostics, Inc.  0.26%   0.110.40%  
Vocal Point   Specialty Medical Supplies  0.13%   0.020.23% 
     Total     100.00%**    
Source:  OIG analysis of  supplier documentation and Medicare claims containing HCPCS code  A4253 KL  for  
 
the 3-month period of July to September 2013. 

*This diabetes  test  strip may also be listed as  the ACCU-CHEK Nano Smartview. 
 
**The percentages in this column do not sum to  the total because  of rounding. 

 
Medicare Market Shares of Mail Order Diabetes Test Strips From JulySeptember 2013 (OEI-04-13-00680)