Department of Health and Human Services 
OFFICE OF 
 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
R 2 C
  OUND    OMPETITIVE 
 
B CPAP/RAD:
ID  DING FOR    
 
D A U
ISRUPTED  CCESS  NLIKELY 
 
D , I
FOR  EVICES   NCONCLUSIVE 
S  
FOR  UPPLIES
 
Daniel R. Levinson  
Inspector General 
 
June 2017 
OEI-01-15-00040   
Report in Brief 
June 2017   
OEI-01-15-00040   
 
Why OIG Did This Review   Round 2 Competitive Bidding for 
Key Takeaway 
The Medicare Prescription Drug,  CPAP/RAD:  Disrupted Access 
Round 2 of the Competitive 
Improvement, and Modernization Act of 
Unlikely  Bidding Program does not 
2003 established the Competitive Bidding 
appear to have disrupted access 
Program for durable medical equipment 
(DME).  The program replaces a fee  What OIG Found  to CPAP/RAD devices, but 
whether it disrupted access to 
schedule with a competitive bidding  Nearly all beneficiaries who in 2013 started using 
CPAP/RAD supplies is unclear.  
process to set Medicare reimbursement  what we refer to in this report as CPAP/RAD 
Nearly all beneficiaries who 
amounts in certain areas.  The Centers for  devicesi.e., continuous positive airway pressure 
started using their devices in 
Medicare & Medicaid Services (CMS)  (CPAP) devices or respiratory assist devices 
analysis found that the program is saving  (RADs)appeared to have continued access to  2013 appeared to still have 
money without compromising beneficiary  them after Round 2 of the Competitive Bidding  access to them after Round 2 
health outcomes.  Round 2 was a  Program for durable medical equipment began in  began.  We saw a bigger decline 
significant expansion of the program to  July 2013.  Medicare payments for devices  in claims for supplies in Round 2 
continued for at least 96 percent of these  CBAs than in non-CBAs after 
more geographic areas. 
beneficiaries after Round 2 began.  Round 2 began.  This may or 
In a letter to OIG, Members of Congress  may not mean that beneficiaries 
Our surveys provided some anecdotal context for 
expressed concerns about the programs  experienced disruptions in 
a sample of beneficiaries for whom payments for 
effect on access to DME and requested  access to supplies; e.g., the 
devices stopped.  For example, their physicians 
that OIG study this issue.    Competitive Bidding Program 
told us that the beneficiaries still needed the 
How OIG Did This Review  devices, and beneficiaries generally reported  may have reduced provision of 
continuing to use them.  unnecessary supplies. In fact, 
We used Medicare claims to identify two 
CMS analysis of Round 1 of the 
populations of beneficiaries for whom  We also found that Medicare payments for 
program found that 
Medicare paid claims before Round 2 of  supplies stopped for 46 percent of beneficiaries in 
beneficiaries who stopped 
the Competitive Bidding Program began in  Round 2 competitive bidding areas (CBAs) 
receiving supplies after Round 1 
2013.  The first population included those  compared to 33 percent in areas that were not 
began often had more than 
with paid claims for CPAP/RAD devices;  CBAs (which we refer to as non-CBAs).  In 2012, 
enough supplies on hand. 
the second, those with paid claims for  the year before Round 2 began, 35 percent of 
CPAP/RAD supplies.  Using discontinued  beneficiaries who had a paid claim for CPAP/RAD 
payments after Round 2 began as a proxy  supplies in the first half of the year did not have a paid claim in the second half of 
the year. 
for disrupted access within each 
population, we compared the rates of  Our surveys provided some limited insights for a sample of beneficiaries without 
discontinued payments in areas that were  continued supply payments.  For example, their physicians told us that the 
part of the program and areas that were  beneficiaries still needed the devices after Round 2 began.  However, only half of 
not.  In addition, we drew samples of  responding beneficiaries reported needing supplies and nearly all of those 
beneficiaries for whom device payments  beneficiaries reported getting needed supplies. 
stopped and for whom supply payments 
What OIG Concludes  
stopped.  We then surveyed the 
Round 2 of the Competitive Bidding Program did not appear to disrupt 
physicians who had ordered devices or 
beneficiary access to CPAP/RAD devices.  Our finding is consistent with CMSs 
supplies for these beneficiaries.  In cases 
conclusion that the program is not compromising beneficiary health outcomes.  
in which physicians reported a continued 
Our analysis is less conclusive regarding whether the program disrupted 
beneficiary need, we surveyed those 
beneficiary access to CPAP/RAD supplies.  We saw a bigger decline in claims for 
beneficiaries to learn about their 
supplies in Round 2 CBAs than in non-CBAs.  The decline may or may not indicate 
experiences after Round 2 began.  Our 
disruptions in receiving needed supplies.  For example, the decline may indicate 
survey results are not projectable but 
that the program reduced the provision of unnecessary supplies, as CMS 
provide some context for a sample of 
determined to be the case with Round 1 of the program.
beneficiaries.  
 
   Full report can be found at http://oig.hhs.gov/oei/reports/oei-01-15-00040.asp   
TABLE OF CONTENTS 
 
Objective ......................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................7 
Findings......................................................................................................10 
Nearly all beneficiaries who started using CPAP/RAD devices in 
2013 appeared to have continued access to them after Round 2 
began ..............................................................................................10 
Claims for CPAP/RAD supplies declined more in Round 2 CBAs 
than in non-CBAs ..........................................................................12 
Conclusion .................................................................................................15 
Appendix A:  Detailed Methodology .........................................................16 
Acknowledgments......................................................................................25 
 
     
OBJECTIVE 
To determine whether Round 2 of the Competitive Bidding Program 
(CBP) appeared to disrupt beneficiary access to continuous positive 
airway pressure (CPAP) devices, respiratory assist devices (RADs), and 
related supplies. 
BACKGROUND  
The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 established the CBP as one of several efforts aimed at combating 
fraud, waste, and abuse.1  For selected categories of durable medical 
equipment (DME), this program replaces a fee-schedule payment 
methodology with a competitive bidding process in certain areas of the 
country.  The goals of the program are to improve the methodology for 
setting DME payment amounts, thereby creating cost savings for Medicare 
and its beneficiaries while maintaining beneficiary access to quality items 
and services.  The Centers for Medicare & Medicaid Services (CMS) 
reports that the CBP is a success; however, Congress and other 
stakeholders have raised concerns about the programs impact on 
beneficiary access to DME. 
According to CMS, the CBP is saving money for Medicare and its 
beneficiaries without compromising access to DME.  CMS reports that the 
CBP has saved more than $4 billion.2  It also reports that the CBP has had 
no negative impact on beneficiary health outcomes.3  CMS conducts 
real-time data analysis to monitor the health status of beneficiaries served 
by the CBP; as of the end of September 2016, CMS had not observed any 
negative changes in beneficiary health outcomes.4  For this analysis, CMS 
monitors health outcomes such as deaths, hospitalizations, and emergency 
room visits, as well as average number of days spent hospitalized, among 
other data. 
 
1 Medicare Prescription Drug, Improvement, and Modernization Act of 2003.  P.L. No. 
108-173  302(b). 
2 CMS, Providing Quality, Affordable Durable Medical Equipment for Beneficiaries.  
Accessed at https://wayback.archive-
it.org/2744/20161207130006/https:/blog.cms.gov/2016/05/17/providing-quality-
affordable-durable-medical-equipment-for-beneficiaries/ on April 26, 2017. 
3 Ibid. 
4 CMS, Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive 
Bidding ProgramHealth Status Monitoring:  Summary of Findings thru the Third 
Quarter of 2016.  Accessed at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/DMEPOSCompetitiveBid/Downloads/DME-Summary-of-Findings.pdf on April 
24, 2017. 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           1   
In a July 2014 letter to the Office of Inspector General (OIG), 
138 Members of Congress expressed concerns about the CBPs effect on 
Medicare beneficiary access to DME.  The letter suggested that 
noncompliance of contracted suppliers in the CBP is affecting the quality 
and choice of DME available to beneficiaries and requested that OIG 
study the effect of the CBP on access to DME. 
Overview of Competitive Bidding 
Under the CBP, DME suppliers compete to contract with Medicare to 
supply selected DME items within specific geographic areas known as 
Competitive Bidding Areas (CBAs).  CMS and its Competitive Bidding 
Implementation Contractor evaluate suppliers bids based on the bid 
amount and several other criteria, including the suppliers eligibility and 
financial stability.5  
Pursuant to the Medicare Modernization Act, CMS established bidding in 
rounds, which CMS must recompete at least once every 3 years.6  Each 
round involves certain DME product categories and CBAs.  Each product 
category includes related products that treats a similar medical condition.  
Product categories include both equipment and the separately billable 
supplies such as masks and tubing.  In January 2016, CMS began using 
pricing data from the CBP to set reimbursement rates for DME in areas of 
the country not subject to the CBP.  (In this report, we refer to areas not 
subject to the CBP as non-CBAs.)  See Table 1 below for details on the 
rounds of the CBP. 
   
 
5 CMS, DMEPOS Competitive Bidding  Home.  Accessed at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/DMEPOSCompetitiveBid/index.html?redirect=/dmeposcompetitivebid/ on 
May 5, 2015. 
6 Social Security Act,  1847(b)(3)(B); 42 U.S.C.  1395w-3(b)(3)(B); 42 CFR 
 414.422(b). 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           2   
Table 1:  CBP Round Effective Dates, CBAs, and Product Categories 
CBP 
Effective Dates  CBAs  Product Categories* 
Round 
Round 1  9 to 13 CBAs  For the Round 1 Rebid  All Effective Dates:  Oxygen; 
Round 1 
Rebid:7  and Round 1 Recompete, 9 CBAs  CPAP/RAD devices and supplies; 
covering the largest metropolitan  enteral nutrition; standard power 
Jan. 1, 2011  
statistical areas by population that did not  wheelchairs; scooters; walkers; 
Dec. 31, 2013  
span multiple Medicare Administrative  hospital beds 
Round 1  Contractor Jurisdictions,9 but not including 
Some Effective Dates:  Complex 
Recompete:8  New York City, Los Angeles, and 
rehabilitative wheelchairs, standard 
Chicago.  For Round 1 2017, to prevent 
Jan. 1, 2014   multi-State CBAs, CMS split 3 of the  manual wheelchairs, support surfaces, 
Dec. 31, 2016  original 9 CBAs into multiple CBAs, for a  mail-order diabetic supplies, commode 
chairs, patient lifts, seat lifts, 
total of 13 CBAs. 
Round 1 2017:  transcutaneous electrical nerve 
stimulation, external infusion pumps, 
Jan. 1, 2017  
nebulizers, negative pressure wound 
Dec. 31, 2018 
therapy pumps 
July 1, 2013    100 to 117 CBAs  For Round 2,  Oxygen, CPAP/RAD, enteral nutrition, 
Round 2 
June 30, 2016  100 CBAs, covering the next 91 largest  standard wheelchairs, walkers, 
metropolitan statistical areas and  hospital beds, support surfaces, 
Recompete: 
including New York City, Los Angeles,  negative pressure wound therapy 
July 1, 2016   and Chicago, with each subdivided into  pumps 
December 31,  multiple CBAs.  For the Round 2 
2018  Recompete, 117 CBAs to prevent   
multi-State CBAs. 
National  July 1, 2013    1 CBA  All parts of the United States, 
Diabetic testing supplies 
Mail Order  June 30, 2016  including the 50 States, the District of 
Program  Columbia, Puerto Rico, the U.S. Virgin 
Recompete: 
Islands, Guam, and American Samoa. 
July 1, 2016  
December 31, 
2018 
 
*Some product categories were renamed and combined from one contract cycle to the next.
Suppliers not awarded a contract under the CBP may continue renting the 
items to beneficiaries in CBAs to whom they were renting at the time the 
CBP was implemented.  Those suppliers may also provide related supplies 
to the beneficiaries to whom they are renting equipment.  These 
 
7 Round 1 was implemented in 2008 and discontinued two weeks later by the passage of 
the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).  As 
required by MIPPA, the supplier competition was held again in 2009 and referred to as 
the Round 1 Rebid. 
8 The Round 1 Rebid included contracts for mail-order diabetic testing supplies, but those 
contracts ended in December 2012, and bidding for diabetic testing supplies moved to the 
National Mail Order Program.  CMS, Round 1 Rebid Mail-Order Diabetic Supply 
Contracts Ending on December 31, 2012.  Accessed at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ 
DMEPOSCompetitiveBid/Downloads/2012-12-14-DMEPOS.pdf on January 12, 2017. 
9 CMS, General Overview of the Final Rule for Competitive Acquisition for Certain 
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies, April 10, 2007.  
Accessed at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/DMEPOSCompetitiveBid/Downloads/DMEPOSRegSumm.pdf on May 5, 
2015. 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           3   
noncontract suppliers are called grandfathered suppliers and must agree to 
meet certain conditions, including accepting assignment of Medicare 
payment as payment in full.10  Grandfathering may support continuity of 
access to DME when an area transitions to the CBP. 
Medicare Coverage of CPAP and RAD Devices and Supplies 
To be covered by Medicare, an item or service must be reasonable and 
necessary for the diagnosis or treatment of illness or injury, or to improve 
the functioning of a malformed body part.11  Medicare considers CPAP 
devices to be reasonable and necessary for beneficiaries diagnosed with 
obstructive sleep apnea.12  Medicare considers RADs to be reasonable and 
necessary for beneficiaries with non-life-threatening conditions that 
require only intermittent and relatively short durations of respiratory 
support, such as restrictive thoracic disorders or severe chronic obstructive 
pulmonary disease.13 
Medicare pays for CPAP devices and RADs (which we refer to 
collectively in this report as CPAP/RAD devices) through monthly rental 
payments.  Payments for the devices may last up to 13 months, after which 
the beneficiary may continue using the equipment.14  For continued 
coverage of a CPAP/RAD device beyond the first 3 months, a beneficiary 
 
10 CMS, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 
Competitive Bidding Program:  Grandfathering Requirements for Non-Contract 
Suppliers (ICN 900923).  Accessed at https://www.cms.gov/Outreach-and-
Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/ 
DME_Grandfathering_Factsheet_ICN900923.pdf on October 25, 2016. 
11 Social Security Act  1862(a)(1)(A), 42 U.S.C.  1395y(a)(1)(A). 
12 CMS, Medicare National Coverage Determination Manual, Pub. No. 100-03, ch. 1, 
pt. 4,  240.4, p. 92.  See also Local Coverage Determination (LCD): Positive Airway 
Pressure Devices for the Treatment of Obstructive Sleep Apnea (L33718) for DME MAC 
Jurisdictions A, B, C, and D.  Accessed at https://www.cms.gov/medicare-coverage-
database/overview-and-quick-search.aspx on November 2, 2016.  Prior to October 1, 
2015, the DME MACs had separate but identical LCDs for PAPs (i.e., LCDs L11528, 
L27230, L11518, and L171 for DME MAC Jurisdictions A, B, C, and D, respectively), 
online at 
http://localcoverage.cms.gov/mcd_archive/overview.aspx?from2=overview.aspx&. 
13 Local Coverage Determination (LCD): Respiratory Assist Devices (L33800) for DME 
MAC Jurisdictions A, B, C, and D.  Accessed at https://www.cms.gov/medicare-
coverage-database/overview-and-quick-search.aspx on July 22, 2016.  Prior to October 1, 
2015, the DME MACs had separate but identical LCDs for RADs (i.e., LCDs L11504, 
L27228, L5023, and L11493 for DME MAC Jurisdictions A, B, C, and D, respectively), 
online at http://localcoverage.cms.gov/mcd_archive/.  
14 42 CFR  414.229.  
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           4   
must be reevaluated to ensure that he or she is using and benefiting from 
the device.15, 16 
Medicare also pays for the related supplies necessary to use the devices.  It 
makes these payments separately from device rental payments and 
continues making them as long as medically necessary.17 
CPAP/RAD supplies range from disposable masks and airhoses that need 
to be replaced as frequently as every 30 days to more durable items like 
chinstraps and headgear that last for months.18  Supplies may need to be 
replaced less frequently, depending on how beneficiaries use and care for 
them.  In fact, Medicare instructs suppliers to send replacement supplies 
only after they have contacted beneficiaries to ensure they need them.19 
Program Integrity Concerns with CPAP/RAD 
Medicares Comprehensive Error Rate Testing (CERT) program has long 
found high error rates in DME, including CPAP/RAD supplies.  In 2012, 
the year before Round 2 of the CBP started, the CERT found a 66-percent 
error rate in DME and a 56-percent error rate in CPAP/RAD supplies.20  In 
addition, when CMS noticed a drop in claims for CPAP/RAD supplies 
after it implemented Round 1 of the CBP, it called a sample of 
beneficiaries and learned that in nearly every case, the beneficiary 
reported having more than enough supplies on hand, often many months 
worth.21  This may indicate that suppliers were sending unneeded 
replacement supplies to beneficiaries despite Medicares requirement for 
suppliers to send them only when beneficiaries needed them. 
 
15 LCDs L33718 and L33800. 
16 CMS, Durable Medical Equipment Center.  Accessed at 
https://www.cms.gov/Center/Provider-Type/Durable-Medical-Equipment-DME-
Center.html on February 13, 2017. 
17 LCDs L33718 and L33800. 
18 Ibid. 
19 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 5,  5.2.8, p. 7.  
Accessed at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/ 
downloads/pim83c05.pdf on October 26, 2016. 
20 CMS, Medicare Fee-For-Service 2012 Improper Payments Report, pp. 31, 35.  
Accessed at https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-
Programs/Medicare-FFS-Compliance-Programs/CERT/Downloads/Medicare-Fee-for-
Service-2012-Improper-Payments-Report.pdf on November 2, 2016. 
21 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 26, 2016.  
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           5   
Related OIG Work 
OIG has a long history of identifying fraud, waste, and abuse in the 
provision of DME devices and supplies.  For example, a 2013 OIG report 
found that Medicare inappropriately paid claims for $6 million worth of 
diabetes test strips.22  Additionally, since passage of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003, OIG has 
opened more than 2,000 investigative cases involving DME suppliers.  
Recently, OIG investigations have contributed to several Department of 
Justice fraud cases against suppliers of CPAP/RAD devices.23, 24, 25, 26 
In April 2014, an OIG audit found that CMS generally met requirements 
in the first round of the CBP.27  However, because of inconsistency in 
following its procedures, CMS awarded Round 1 contracts to a small 
number of suppliers that did not meet program requirements.  OIG is also 
auditing the process that CMS used to conduct competitive bidding and to 
make pricing determinations for certain categories of DME under 
Rounds 1 and 2 of the CBP.  OIG has released three memorandum reports 
evaluating the market share of different types of diabetes test strips.28, 29, 30 
 
22 OIG, Inappropriate and Questionable Medicare Billing for Diabetes Test Strips,  
OEI-04-11-00330, August 2013. 
23 U.S. Department of Justice, Hendersonville Physician Indicted on Federal Kickback 
Charges, June 2016.  Accessed at https://www.justice.gov/usao-mdtn/pr/hendersonville-
physician-indicted-federal-kickback-charges on  
February 16, 2017. 
24 U.S. Department of Justice, Connecticut Medical Equipment Company Pays $600,000 
to Settle False Claims Act Allegations, January 2016.  Accessed at 
https://www.justice.gov/usao-ct/pr/connecticut-medical-equipment-company-pays-
600000-settle-false-claims-act-allegations-0 on February 16, 2017. 
25 U.S. Department of Justice, Respironics to Pay $34.8 Million for Allegedly Causing 
False Claims to Medicare, Medicaid and Tricare Related to the Sale of Masks Designed 
to Treat Sleep Apnea, March 2016.  Accessed at 
https://www.justice.gov/opa/pr/respironics-pay-348-million-allegedly-causing-false-
claims-medicare-medicaid-and-tricare on February 16, 2017. 
26 U.S. Department of Justice, Bay Sleep Clinic and Related Entities Agree To Pay the 
United States $2.6 Million To Settle False Claims Act Allegations, December 2016.  
Accessed at https://www.justice.gov/usao-ndca/pr/bay-sleep-clinic-and-related-entities-
agree-pay-united-states-26-million-settle-false on February 16, 2017. 
27 OIG, CMS Generally Met Requirements in the DME Competitive Bidding Round 1 
Rebid Program, A-05-12-00067, April 2014. 
28 OIG, Memorandum Report:  Medicare Market Shares of Mail Order Diabetes Test 
Strips from July-September 2013, OEI-04-13-00680, June 2014. 
29 OIG, Memorandum Report:  Medicare Market Shares of Mail Order Diabetes Test 
Strips Immediately Prior to the National Mail Order Program, OEI-04-13-00681, 
June 2014. 
30 OIG, Memorandum Report:  Medicare Market Shares of Mail Order Diabetes Test 
Strips 3-6 Months After the Start of the National Mail Order Program, OEI-04-13-00682, 
November 2014. 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           6   
This study is the first in a series and concerns CPAP/RAD devices and 
supplies, which in 2013 made up 33 percent of paid claims in Round 2 of 
the CBP.  Forthcoming studies in this series will examine how the 2013 
launch of Round 2 of the CBP has affected beneficiary access to oxygen 
and to enteral nutrition, respectively. 
METHODOLOGY 
This inspection considers two different populations of Medicare 
beneficiaries over two different time spans to determine whether Round 2 
of the CBP appeared to disrupt access to CPAP/RAD devices and supplies.  
The first population includes beneficiaries using CPAP/RAD devices and 
covers the 6 months before and the 6 months after Round 2 contracts 
became effective on July 1, 2013.  The second population includes 
beneficiaries using CPAP/RAD supplies and covers the same two 6-month 
periods.  For ease of presentation in this report, we refer to July 1, 2013
the date Round 2 contracts went into effectas the date that Round 2 
began. 
We used Medicare claims data to identify our populations.  Both 
populations include beneficiaries who resided in Round 2 CBAs and 
non-CBAs, which enabled us to make comparisons to look for evidence of 
potential disruptions in access. 
Beneficiaries With Claims for CPAP/RAD Devices:  Beneficiaries in 
our first population, which includes beneficiaries using CPAP/RAD 
devices, met both of the criteria below: 
  They started using CPAP/RAD devices in the first half of calendar 
year 2013, before Round 2 began.  Choosing beneficiaries who 
were new to CPAP/RAD eliminated the chance that any 
interruption in Medicare payments for CPAP/RAD rental was 
because beneficiaries had reached the 13-month limit on payments, 
at which point the beneficiaries own the devices. 
  They had five or more paid claims for CPAP/RAD devices in the 
first half of 2013.  This ensured that our focus was on beneficiaries 
with demonstrated compliance beyond 90 days and decreased the 
chance that any interruption in Medicare payments for CPAP/RAD 
devices would be due to beneficiary noncompliance. 
Beneficiaries With Claims for CPAP/RAD Supplies:  Our second 
population includes beneficiaries for whom there was at least one claim 
for CPAP/RAD supplies in the first half of 2013. 
Using Medicare claims data, we determined the extent to which 
beneficiaries in our populations appeared to have their access to 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           7   
CPAP/RAD devices and/or supplies disrupted by Round 2 of the CBP.  
Specifically, we used the absence of paid claims for beneficiaries in each 
population after Round 2 began as a marker of potential disruption in 
access.  We calculated the percentages of beneficiaries in each population 
for whom Medicare payments stopped and compared them between 
beneficiaries residing in Round 2 CBAs and non-CBAs. 
To learn more about the experience of beneficiaries with a potential 
disruption in access after Round 2 began, we selected samples of 
beneficiaries in our populations for whom Medicare payments stopped.  
We stratified the samples by whether the beneficiaries resided in Round 2 
CBAs or non-CBAs.  To determine whether the sampled beneficiaries 
continued to need the items after Round 2 began, we surveyed separately 
the physicians who ordered their CPAP/RAD devices and the physicians 
who ordered their CPAP/RAD supplies.  Each physician we surveyed 
ordered devices or supplies for one of our sampled beneficiaries.  When 
a physician told us that the beneficiary had a continued need for the items 
and Medicare records indicated that the beneficiary was still living 
in 2016, we considered that beneficiary to be eligible for our survey, 
which asked beneficiaries to describe their experiences after Round 2 
began.  Tables 2 and 3 provide details on these samples and surveys. 
Table 2:  Surveys Regarding CPAP/RAD Devices 
Round 2 
  Non-CBAs  Total 
CBAs 
Total Physicians in Sample  150  150  300 
Physicians Surveyed1  144  145  289 
Physicians Responding With 
106  116  222 
Usable Data2 
Physician Response Rate   71%  77%  74% 
Beneficiaries Eligible for 
70  78  148 
Survey 
Beneficiaries Responding With 
27  31  58 
Usable Data 
Beneficiary Response Rate  39%  40%  39% 
Source:  OIG analysis of physician and beneficiary responses to survey, 2016. 
1 We did not survey a physician if the beneficiary was deceased when bidding began, if the physician 
was under investigation, or if the physician was no longer in business. 
2 In some cases, physicians cooperated by responding to our survey, but their responses included no 
usable information. 
 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           8   
Table 3:  Surveys Regarding CPAP/RAD Supplies 
Round 2 
  Non-CBAs  Total 
CBAs 
Total Physicians in Sample  150  150  300 
Physicians Surveyed1  147  143  290 
Physicians Responding With 
96  97  193 
Usable Data2 
Physician Response Rate   64%  65%  64% 
Beneficiaries Eligible for 
69  72  141 
Survey 
Beneficiaries Responding With 
38  24  62 
Usable Data 
Beneficiary Response Rate  55%  33%  44% 
Source:  OIG analysis of physician and beneficiary responses to survey, 2016. 
1 We did not survey a physician if the beneficiary was deceased when bidding began, if the physician 
was under investigation, or if the physician was no longer in business. 
2 In some cases, physicians cooperated by responding to our survey, but their responses included no 
usable information. 
 
Limitations 
This review has two limitations.  First, discontinuation of claims or 
disproportionately lower rates of continued claims for supplies in Round 2 
CBAs may or may not indicate disruption of or impediment to access to 
supplies.  Such discontinuation or lower rates may be caused by factors 
that did not disrupt access to supplies.  For example, if some beneficiaries 
had received more supplies than they needed prior to Round 2 of the CBP, 
they could have had fewer claims after Round 2 yet still have accessed all 
needed supplies. 
Secondly, our survey response rate was too low to project the results to all 
beneficiaries for whom claims did not continue.  Therefore, we present our 
survey responses as testimonial evidence to provide insights into these 
individual beneficiaries experiences in accessing CPAP/RAD devices and 
supplies.  We did not independently verify responses from physicians and 
beneficiaries, nor did we conduct a medical review of beneficiaries 
medical need for these devices or supplies.  See Appendix A for a detailed 
description of our methodology. 
Standards 
We conducted this study in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           9   
FINDINGS 
Nearly all beneficiaries who started using 
CPAP/RAD devices in 2013 appeared to have 
continued access to them after Round 2 began 
In the first half of 2013, 41,575 beneficiaries started using CPAP/RAD 
devices in Round 2 CBAs and non-CBAs.  These beneficiaries had claims 
that indicated Medicare paid for the devices for at least 5 months, 
suggesting that the beneficiaries had met the Medicare criteria for 
continued coverage beyond 3 months by the time Round 2 started on 
July 1, 2013. 
Medicare payments continued for over 95 percent of 
beneficiaries in both Round 2 CBAs and non-CBAs 
After CMS awarded Round 2 contracts and competitive bidding began, 
96 percent of beneficiaries in Round 2 CBAs and 97 percent in non-CBAs 
had one or more paid claims for monthly rental of CPAP/RAD devices.  
Furthermore, Medicare paid three or more claims for nearly all of these 
beneficiaries, which suggests that beneficiaries continued to possess 
CPAP/RAD devices both in Round 2 CBAs and non-CBAs months after 
bidding began.  Continued payment suggests continued access.  See 
Figure 1 for additional detail on the number and percentage of 
beneficiaries with continued or stopped paid claims for devices. 
Figure 1:  Numbers and Percentages of Beneficiaries for Whom Paid 
Claims for CPAP/RAD Devices Continued or Stopped After Round 2 Began 
 
Source:  OIG analysis of Medicare claims data, 2016. 
 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           10   
In addition, Medicare claims suggest that nearly all of these beneficiaries 
likely continued to possess devices without interruption, indicating 
continued access.  In the first half of 2013, suppliers billed Medicare every 
31 days, on average, for a beneficiarys CPAP/RAD rental.  Fewer than 
2 percent of beneficiaries with continuing payments in both Round 2 
CBAs and non-CBAs went longer than 31 days between their last claim 
before bidding started and their first claim after bidding started.  This 
suggests that beneficiaries with continued Medicare payments 
overwhelmingly kept their CPAP/RAD devices without interruption after 
bidding began.  CMSs grandfathering policy may have supported 
continued access; however, we did not determine whether these 
beneficiaries switched suppliers and received a new device or continued 
on with a grandfathered supplier. 
In their survey responses, physicians told us that beneficiaries 
without continued payments still had a prescribed need for the 
devices, and beneficiaries reported continued use of the 
devices 
Our surveys provide some insights, albeit limited, to the experiences of 
these beneficiaries for whom payments stopped after Round 2 beganan 
indicator of a potential disruption in access.  For example, the physicians 
who responded to our survey generally reported that beneficiaries for 
whom they ordered CPAP/RAD devices still had a prescribed need for 
them after bidding began.  This was the case both in Round 2 CBAs and 
non-CBAs.  In responding to our key question on beneficiaries prescribed 
need for devices, 80 of 87 physicians in Round 2 CBAs who provided 
usable data reported that the beneficiaries for whom they ordered devices 
still had a prescribed need for those devices.  This compares to 97 of 
100 physicians in non-CBAs who responded with usable data. 
Our survey also provided limited insights to alternatives to CPAP/RAD 
devices.  For example, physicians rarely reported prescribing alternative 
devices, such as oral appliances, for beneficiaries who had a continued 
prescribed need for CPAP/RAD devices.  According to our survey, 
responding physicians prescribed alternative devices to 3 beneficiaries in 
Round 2 CBAs and to 10 beneficiaries in non-CBAs. 
Finally, responding beneficiaries provided some insights on their 
experiences with CPAP/RAD devices.  For example, the majority of these 
beneficiaries reported continued use of CPAP/RAD devices, even though 
Medicare stopped paying for the devices.  Specifically, 18 of 
27 responding beneficiaries from Round 2 CBAs and 21 of 31 responding 
beneficiaries from non-CBAs reported continued use of CPAP/RAD 
devices.  Seven of these beneficiaries in non-CBAs reported paying out of 
pocket compared to four beneficiaries in Round 2 CBAs who said they 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           11   
paid out of pocket.  Having to pay out of pocket could limit access to 
needed items. 
Also, of the nine beneficiaries in Round 2 CBAs who reported that they 
stopped using their CPAP/RAD devices, two reported doing so because 
they could not find a supplier.  In comparison, 10 beneficiaries in 
non-CBAs reported that they stopped using their CPAP/RAD devices, but 
none cited inability to find a supplier as a reason for doing so.  See 
Figure 2 for additional detail on survey responses from beneficiaries. 
Figure 2:  Survey Responses From a Subset of Beneficiaries for Whom 
Paid Claims for CPAP/RAD Devices Stopped 
 
Source:  OIG analysis of beneficiary responses to survey, 2016. 
 
Claims for CPAP/RAD supplies declined more in 
Round 2 CBAs than in non-CBAs 
In the first half of 2013, 895,618 beneficiaries had one or more claims for 
CPAP/RAD supplies in Round 2 CBAs and non-CBAs.  These 
beneficiaries may or may not have needed to replace their CPAP/RAD 
supplies in the second half of 2013. 
After Round 2 began, the rate at which Medicare payments for 
CPAP/RAD supplies stopped was 13 percent higher in Round 2 
CBAs than in non-CBAs 
Forty-six percent of beneficiaries in Round 2 CBAs who had one or more 
paid claims for CPAP/RAD supplies in the first half of 2013 had no paid 
claims in the second half of the year, compared to 33 percent in 
non-CBAs.  The percentage of beneficiaries with no paid claims in 
non-CBAs is in line with the claim patterns for the year before Round 2 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           12   
beganin 2012, 35 percent of beneficiaries who had a paid claim for 
CPAP/RAD supplies in the first half of the year did not have a paid claim 
in the second half of the year.  The higher percentage of beneficiaries 
without claims in Round 2 CBAs may suggest a potential disruption in 
access to CPAP/RAD supplies.  However, it may also indicate that the 
CBP reduced the provision of unnecessary replacement supplies to 
beneficiaries.  This decline in claims for supplies is also consistent with 
CMSs statements during interviews that the CBP reduced the provision of 
unnecessary replacement supplies to beneficiaries.  See Figure 3 for 
additional detail on the number and percentage of beneficiaries with 
continued or stopped paid claims for supplies. 
 
Figure 3:  Numbers and Percentages of Beneficiaries for Whom Paid Claims 
for CPAP/RAD Supplies Continued or Stopped After Round 2 Began 
 
 
Source:  OIG analysis of Medicare claims data, 2016. 
 
In their survey responses, physicians told us that beneficiaries 
still had a prescribed need for supplies, and beneficiaries 
reported getting supplies when they needed them 
We surveyed physicians and beneficiaries to gain some insight to the 
experience of beneficiaries for whom Medicare payments for CPAP/RAD 
supplies stopped after Round 2 began.  For example, responding 
physicians who provided usable data largely told us that the beneficiary 
we asked about continued to have a prescribed need for them after 
Round 2 began.  In responding to our key question on beneficiaries 
prescribed need for supplies, 77 of 80 physicians in Round 2 CBAs who 
provided usable data reported that the beneficiary for whom they ordered 
supplies still had a prescribed need for supplies after Round 2 began, 
compared to 80 of 85 physicians in non-CBAs. 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           13   
Beneficiaries who responded to our survey provided insight to their 
experience.  About half of beneficiaries who responded to our survey 
reported needing to replace supplies in the 6 months after Round 2 began.  
Nearly all of these beneficiaries reported getting supplies when they 
needed them.  Three of 8 beneficiaries in non-CBAs who reported needing 
supplies reported paying out of pocket for them, compared to 4 of 20 
beneficiaries needing supplies in Round 2 CBAs.  See Figure 4 for 
additional detail on survey responses from beneficiaries. 
 
Figure 4:  Survey Responses From a Subset of Beneficiaries for Whom 
Paid Claims for CPAP/RAD Supplies Stopped 
 
Source:  OIG analysis of beneficiary responses to survey, 2016. 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           14   
CONCLUSION 
This study is the first in a series aimed at determining whether the CBP, 
which transformed how Medicare provides and pays for DME, has 
disrupted access to DME.  In this study we examined CPAP/RAD devices 
and supplies, which together accounted for a third of paid Medicare claims 
under Round 2 of the CBP in 2013, the year we examined.  CPAP/RAD 
devices and supplies are important for the millions of Medicare 
beneficiaries with conditions requiring respiratory support. 
According to our claims analysis, Round 2 of the CBP does not appear to 
have disrupted beneficiary access to CPAP/RAD devices.  This finding is 
consistent with CMSs conclusion that the CBP is not compromising 
beneficiary health outcomes. 
Our analysis is less conclusive regarding whether the CBP disrupted 
beneficiary access to supplies associated with CPAP/RAD.  We saw 
a bigger decline in claims for supplies in Round 2 CBAs than non-CBAs.  
The decline may or may not suggest disruptions in receiving needed 
supplies, as it may instead indicate thatsimilar to what CMS analysis 
found after Round 1 of the CBP, and as stated by CMSRound 2 of the 
CBP reduced the provision of unnecessary supplies. 
Forthcoming OIG studies will examine how the CBP affected beneficiary 
access to oxygen and enteral nutrition under Round 2 of the CBP.  
Through these evaluations and other efforts, OIG will continue to monitor 
DME in Medicare. 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           15   
APPENDIX A 
Detailed Methodology 
Scope 
This inspection considers two different populations of Medicare 
beneficiaries over two different time spans to determine the effect of 
Round 2 of the CBP on access to CPAP/RAD devices and supplies.  The 
first population includes beneficiaries using CPAP/RAD devices and 
covers the 6 months before and the 6 months after Round 2 contracts 
became effective on July 1, 2013.  The second population includes 
beneficiaries using CPAP/RAD supplies and covers the same two 6-month 
periods.  For ease of presentation in this report, we refer to July 1, 2013, as 
the date that Round 2 began. 
We used Medicare claims data to identify our populations.  Both 
populations include beneficiaries who resided in Round 2 CBAs and 
non-CBAs, which enabled us to make comparisons to look for evidence of 
potential disruptions in access. 
Beneficiaries With Claims for Devices:  Beneficiaries in our first 
population, which includes beneficiaries using CPAP/RAD devices, met 
both of the criteria below: 
  They started using CPAP/RAD devices in the first half of calendar 
year 2013, before Round 2 began.  Choosing beneficiaries who 
were new to CPAP/RAD eliminated the chance that any 
interruption in Medicare payments for CPAP/RAD rental was 
because beneficiaries had reached the 13-month limit on payments, 
at which point the beneficiaries own the devices. 
  They had five or more paid claims for CPAP/RAD devices in the 
first half of 2013.  This ensured that our focus was on beneficiaries 
with demonstrated compliance beyond 90 days and decreased the 
chance that any interruption in Medicare payments for CPAP/RAD 
devices would be due to beneficiary noncompliance. 
Combined, these criteria enabled us to focus our analysis on beneficiaries 
who generally could be expected to continue using and having Medicare 
payments for devices for several months after Round 2 began. 
Beneficiaries With Claims for Supplies:  Our second population 
includes beneficiaries for whom there was at least one claim for 
CPAP/RAD supplies in the first half of 2013. 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           16   
 
Data Sources 
Our data sources for this evaluation were Medicare claims and 
administrative data and survey responses we collected from samples of 
beneficiaries and the physicians who ordered their DME.  We used the 
continuation of paid claims as a marker for continued access after Round 2 
began.  We surveyed physicians and beneficiaries to learn about the 
experience of beneficiaries for whom Medicare stopped paying for devices 
and supplies after Round 2 began.  Because we did not receive sufficiently 
high response rates to our surveys, we did not project the survey responses 
we received to our populations of beneficiaries. 
Identification of Beneficiaries Using Devices and Supplies 
We identified beneficiaries who used CPAP/RAD devices and supplies in 
2013 using data from Medicares National Claims History File and CMSs 
Competitive Bidding Implementation Contractor. 
We first created files of claims for CPAP/RAD devices and supplies.  To 
do so, we downloaded a list of Healthcare Common Procedure Coding 
System (HCPCS) codes for CPAP/RAD devices and supplies subject to 
bidding from the Competitive Bidding Implementation Contractors 
website.  We then used these HCPCS codes to extract paid claims for 
CPAP/RAD devices and supplies from Medicares National Claims 
History File.  We created one claim file for 2012 and another for 2013.  
Next, we matched ZIP Codes from Medicares Competitive Bidding 
Implementation Contractor to the beneficiary ZIP Code on the claim to 
identify each claim as being for a beneficiary in a Round 2 CBA, Round 1 
CBA, or non-CBA. 
To identify beneficiaries using devices, we used our claims files to select 
beneficiaries who were new users of CPAP/RAD with established 
compliance with the therapy.  Specifically, we selected all beneficiaries in 
Round 2 CBAs and non-CBAs for whom there were no paid claims for 
devices in 2012 and at least five paid claims for devices in the first half of 
2013.  This identified 41,575 beneficiaries. 
To identify beneficiaries using CPAP/RAD supplies, we used our 
2013 claims file to select all beneficiaries for whom there was at least one 
paid claim for supplies from January through June 2013.  This identified 
895,618 beneficiaries.  We used this criterion because CPAP/RAD 
supplies comprise a wide range of items, some of which may need to be 
replaced once a month and others every several months.  See Tables A-1 
and A-2 for additional detail on beneficiary selection criteria. 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           17   
Table A-1:  Selection Criteria for Sample of Beneficiaries Using CPAP/RAD 
Devices 
Characteristics of   Beneficiaries 
Beneficiaries 
Device-Using Beneficiaries in  in Round 2  Total 
in Non-CBAs 
Sample  CBAs 
HCPCS:  With RR Modifier; 
E0470E0472:  Respiratory 
Assist Device 
E0601: Continuous Airway 
Pressure Device 
  18,634  22,941  41,575 
Payment History 
No paid claims in 2012 
At least 5 paid claims 
Jan.-June 2013 
 
Source:  OIG analysis of Medicare claims data, 2016. 
 
Table A-2:  Selection Criteria for Sample of Beneficiaries Using CPAP/RAD 
Supplies 
Characteristics of   Beneficiaries 
Beneficiaries 
Supply-Using Beneficiaries in  in Round 2  Total 
in Non-CBAs 
Sample  CBAs 
HCPCS:   
A4604:  Tubing With Heating 
Element 
A7027A7029:  Combination 
Oral/Nasal Mask, etc.  
A7030A7033:  Full Face Mask, 
etc. 
A7034A7039:  Nasal Interface, 
etc. 
401,242  494,376  895,618 
A7044A7045:  Oral Interface, 
Exhalation Port 
A7046:  Water Chamber for 
Humidifier 
 
Payment History 
At least 1 paid claim 
Jan.-June 2013 
 
Source:  OIG analysis of Medicare claims data, 2016 
 
Identification of Populations of Beneficiaries for Whom Medicare Payments 
Stopped 
Next, for each group of beneficiaries we identified, we identified the 
population of those for whom there were no paid Medicare claims after 
Round 2 began.  For CPAP/RAD devices, we identified 
1,498 beneficiaries for whom there were claims for CPAP/RAD devices 
from January 1 through June 30, 2013, only.  We did the same for the 
supplies, identifying 348,271 beneficiaries for whom there were claims for 
supplies in the first half of 2013 only.  See Tables A-3 and A-4 for 
additional detail on beneficiary claims data. 
 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           18   
Table A-3:  Beneficiaries With Paid Claims for CPAP/RAD Devices 
Status of Beneficiaries Who  Beneficiaries 
Beneficiaries 
Used CPAP/RAD Devices  in Round 2  Total 
in Non-CBAs 
Before Round 2 Began  CBAs 
Medicare payments stopped 
after Round 2 began (device  719  779  1,498 
population) 
Medicare payments continued 
17,915  22,162  40,077 
after Round 2 began 
Source:  OIG analysis of Medicare claims data, 2016. 
 
Table A-4:  Beneficiaries With Paid Claims for CPAP/RAD Supplies 
Status of Beneficiaries Who  Beneficiaries 
Beneficiaries 
Used CPAP/RAD Supplies  in Round 2  Total 
in Non-CBAs 
Before Round 2 Began  CBAs 
Medicare payments stopped 
after Round 2 began (supply  185,551  162,720  348,271 
population) 
Medicare payments continued 
215,691  331,656  547,347 
after Round 2 began 
Source:  OIG analysis of Medicare claims data, 2016. 
 
Sample Selection 
From each population of beneficiaries for whom Medicare payments 
stopped after Round 2 began, we drew a statistical sample of 
300 beneficiaries.  We stratified the samples by whether the beneficiaries 
were in Round 2 CBAs or non-CBAs.  See Table A-5 for a description of 
beneficiary sample sizes. 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           19   
Table A-5:  Samples of Beneficiaries Using CPAP/RAD Devices and 
Supplies 
Beneficiaries 
Beneficiaries 
Type of Beneficiary  in Round 2  Total 
in Non-CBAs 
CBAs 
Beneficiaries using CPAP/RAD 
150  150  300 
devices 
Beneficiaries using CPAP/RAD 
150  150  300 
supplies 
     Total  300  300  600 
Source:  OIG analysis of Medicare claims data, 2016. 
Physician Survey  
To determine whether beneficiaries in our samples still had a prescribed 
need for devices or supplies, we surveyed the physicians who were the 
ordering physician on the beneficiaries final CPAP/RAD claims and who 
were still living.  We sent similar but different surveys for devices and 
supplies.  The surveys asked physicians if the beneficiary for whom they 
ordered devices or supplies had a prescribed need for them during the 
period from July 1 through December 31, 2013.  In the surveys, we also 
asked physicians if they prescribed alternate DME to replace CPAP/RAD 
devices, such as a home ventilator or oral appliance.  
We made at least three attempts to reach physicians with our survey.  We 
sent the surveys using a trackable delivery service and accepted survey 
responses by mail and by fax to a secure fax server.  We received 
responses from 501 of the 579 physicians we surveyed.  In 352 of those 
responses, physicians were able to answer our key question as to whether 
or not the beneficiary still needed devices or supplies after bidding began.  
In 289 of these responses, physicians told us that the beneficiary had a 
prescribed need for CPAP/RAD devices or supplies after Round 2 began.  
See Tables A-6 and A-7 for information on physician survey sampling and 
responses. 
   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           20   
Table A-6:  Results From Survey of Physicians for Beneficiaries Using 
CPAP/RAD Devices 
Round 2 
Characteristics of Physicians  Non-CBAs  Total 
CBAs 
A)  Total Physicians in 
150  150  300 
Sample 
B)  Physicians Surveyed1 
144  145  289 
C)  Physicians Responding 
106  116  222 
with Usable Data2 
D)  Physicians Answering Key 
87  100  187 
Question 
Physician Response Rate 
71%  77%  74% 
(Row C/Row A) 
Source:  OIG analysis of data from survey of physicians, 2016. 
1 We did not survey a physician if the beneficiary was deceased when bidding began, if the physician 
was under investigation, or if the physician was no longer in business. 
2 In some cases, physicians cooperated by responding to our survey, but their responses included no 
usable information.  
 
Table A-7:  Results from Survey of Physicians for Beneficiaries Using 
CPAP/RAD Supplies 
Round 2 
Characteristics of Physicians  Non-CBAs  Total 
CBAs 
A)  Total Physicians in 
Sample  150  150  300 
B)  Physicians Surveyed1  147  143  290 
C)  Physicians Responding 
With Usable Data2  96  97  193 
D)  Physicians Answering Key 
Question  80  85  165 
Physician Response Rate 
(Row C/Row A)  64%  65%  64% 
Source:  OIG analysis of data from survey of physicians, 2016. 
1 We did not survey a physician if the beneficiary was deceased when bidding began, if the physician 
was under investigation, or if the physician was no longer in business. 
2 In some cases, physicians cooperated by responding to our survey, but their responses included no 
usable information.  
 
Beneficiary Survey 
To learn about beneficiaries experiences in the 6 months immediately 
after Medicare stopped paying for their CPAP/RAD devices or supplies, 
we sent a brief survey to beneficiaries.  Specifically, we surveyed the 
beneficiaries who were still living and whose physicians told us in the 
physician survey that they had a prescribed need for devices or supplies 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           21   
after Round 2 began.  We sent similar but different surveys for devices and 
supplies.  In the surveys, we asked beneficiaries if they continued to use 
CPAP/RAD devices/supplies after Round 2 began and, if so, how they 
managed given that Medicare did not pay for their devices/supplies.  
We made at least three attempts to reach beneficiaries with our survey.  We 
used a trackable delivery service to send the surveys to beneficiaries and 
provided them with postage-paid business reply mail envelopes for 
returning the surveys directly to the Office of Inspector General.  We 
received responses from 124 of the 289 beneficiaries we surveyed.  We did 
not survey beneficiaries when Medicare records indicated that they were 
no longer living.  See Tables A-8 and A-9 for information on beneficiary 
survey eligibility and responses.   
Table A-8:  Response Rates for Survey of Beneficiaries Using CPAP/RAD 
Devices 
Beneficiaries 
Beneficiaries 
Status of Beneficiaries  in Round 2  Total 
in Non-CBAs 
CBAs 
Beneficiaries Eligible for 
70  78  148 
Survey 
Beneficiaries Responding With 
27  31  58 
Usable Data 
Beneficiary Response Rate  39%  40%  39% 
Source:  OIG analysis of survey data, 2016. 
 
Table A-9:  Response Rates for Survey of Beneficiaries Using CPAP/RAD 
Supplies 
Beneficiaries 
Beneficiaries 
Status of Beneficiaries  in Round 2  Total 
in Non-CBAs 
CBAs 
Beneficiaries Eligible for 
69  72  141 
Survey 
Beneficiaries Responding With 
38  24  62 
Usable Data 
Beneficiary Response Rate  55%  33%  44% 
Source:  OIG analysis of survey data, 2016. 
Data Analysis 
All-Beneficiary Analysis Using Medicare Claims 
We analyzed claims data to determine the extent to which beneficiaries 
experienced a potential disruption in access to devices or supplies.  To do 
so, we calculated the percentage of device-using beneficiaries for whom 
there were no paid claims for devices after Round 2 began and the 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           22   
percentage of supply-using beneficiaries for whom there were no paid 
claims for supplies after Round 2 began.  We used these percentages as the 
basis of our lead findings for devices and supplies. 
We analyzed claims data to determine two aspects of Medicare payments 
for device-using beneficiaries for whom there were continued payments 
after bidding began.  First, we counted the number of paid claims for 
devices for these beneficiaries after Round 2 began to determine whether 
payments had continued for a sustained period.  Second, we checked 
whether these beneficiaries experienced an interruption in payments 
immediately after Round 2 began.  To do so, we calculated the days 
between the last paid claim for a device before Round 2 began and the first 
paid claim after Round 2 began.  We then determined the percentage of 
beneficiaries for whom this span was greater than 31 days, which was the 
average, median, and mode number of days between claims for three of 
the four CPAP/RAD devices subject to bidding and was the median and 
mode number of days for the fourth device.  
We also analyzed claims data to determine the Medicare payments for our 
sample of supply-using beneficiaries in the 6 months before Round 2 
began.  Specifically, we determined the average number of supply claims 
that beneficiaries had and the number of unique types of supplies they 
received. 
Tabulation of Physician and Beneficiary Survey Responses 
We counted responses to our physician survey to determine the number of 
responding physicians who told us that beneficiaries in our samples still 
needed devices or supplies after Round 2 began.  Our denominator of 
responses for this analysis considered the responses in which physicians 
were able to tell us whether or not the beneficiary still needed devices or 
supplies after Round 2 begani.e., we did not include cannot determine 
responses. 
We also counted survey responses to determine the extent to which 
responding physicians reported that they prescribed alternate DME to 
beneficiaries in our samples. 
We counted responses to our survey of device-using beneficiaries to 
determine the extent to which beneficiaries reported that they continued to 
use CPAP/RAD devices in the 6 months after Round 2 began.  For 
beneficiaries who reported continued use, we counted how many reported 
that they continued to use the device from their existing supplier, found a 
new supplier, paid out of pocket, or borrowed a device from a friend.  
When beneficiaries reported stopping use of CPAP/RAD, we counted how 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           23   
many reported stopping because they could not find a supplier or they had 
switched to an alternative device. 
We counted responses to our survey of supply-using beneficiaries to 
determine the extent to which beneficiaries reported that they continued to 
use CPAP/RAD supplies in the 6 months after Round 2 began, and, if so, 
whether they needed any supplies during that time.  For beneficiaries who 
reported that they did need supplies during that time, we counted how 
many reported that they got supplies from their existing supplier, found a 
new supplier, paid out of pocket, or borrowed a device from a friend. 
Limitations 
This review has two limitations.  First, discontinuation of claims or 
disproportionately lower rates of continued claims for supplies in Round 2 
CBAs may indicate disrupted or impeded access to supplies.  Such 
discontinuation or lower rates may be caused by factors that did not 
disrupt access to supplies.  For example, if some beneficiaries had 
received more supplies than they needed prior to Round 2 of the CBP, they 
could have had fewer claims after Round 2 yet still have accessed all 
needed supplies. 
Secondly, our survey response rate was too low to project the results to all 
beneficiaries for whom claims did not continue.  Therefore, we present our 
survey responses as testimonial evidence to provide insights into these 
individual beneficiaries experiences in accessing CPAP/RAD devices and 
supplies.  We did not independently verify responses from physicians and 
beneficiaries, nor did we conduct a medical review of beneficiaries 
medical need for these devices or supplies.   
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           24   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Joyce Greenleaf, Regional 
Inspector General for Evaluation and Inspections in the Boston regional 
office, and Kenneth Price, Deputy Regional Inspector General.  
Jesse Valente served as the team leader for this study.  Other Office of 
Evaluation and Inspections staff from the Boston regional office who 
conducted the study include Grace Ajayi, Jessica Fargnoli, Lyncy Ha, and 
Maria Maddaloni.  Central office staff who provided support include 
Kevin Farber, Evan Godfrey, and Christine Moritz. 
Round 2 Competitive Bidding for CPAP/RAD (OEI-01-15-00040)           25   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS) programs, as  well  as the health  and welfare of individuals served by those programs.  
This statutory mission is carried  out through a nationwide network of audits, investigations,  
and inspections conducted by the following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of fraud and misconduct  related to HHS programs, operations, and individuals.  With  
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and  abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.