The Hidden Costs of a Flawed Medicare Auction Peter Cramton 1 20 January 2012

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1 Summary The Hidden Costs of a Flawed Medicare Auction Peter Cramton 1 2 January 212 In the fall of 21, 167 auction experts from top universities around the country sent a letter to Congress expressing concern regarding the Centers for Medicare and Medicaid Services (CMS) planned implementation of the durable medical equipment (DME) competitive bidding program which was scheduled to be begin in nine cities beginning January 211. In June of 211, 244 economists, computer scientists, and engineers from top universities across the country, including four Nobel laureates, wrote the White House warning that continued implementation of the current CMS competitive bidding program would lead to market failure and thereby deny seniors access to this critical health care benefit while increasing health care costs. Pursuant to a Freedom of Information Request (FOIA), CMS has now released startling new data which demonstrates how destructive the current competitive bidding program was in its first year of implementation. The following is an analysis of this recently released data and recommendations of how Congress can address these problems before the program is expanded to 91 cities across the country. In January 211 in the nine pilot cities, CMS began procuring DME products from the auction winners (contract suppliers) at prices determined in the Round 1 Rebid auction. The auction led to sharp reductions in the number of suppliers and in the prices paid to suppliers. As a result of the auction, most Medicare beneficiaries in the pilot regions had to find new suppliers. Both theory and experiment predict that the flawed auction design would lead to unsustainably low prices and the elimination of efficient suppliers. As a result, Medicare beneficiaries would have a difficult time finding a quality supplier and program utilization would decline. For example, suppliers facing below cost reimbursements may engage in selective fulfillment, may be out of stock, or may go out of business. Judging from the large reduction in claims following enactment of the program, it appears that program utilization indeed did drop substantially in the pilot regions. Recent CMS data show the implication of the decline in utilization: higher risk of death, higher frequency of ER visits and hospitalization, and longer hospital stays. These results suggest that the cost savings in Medicare DME are dwarfed by the much higher costs to Medicare coming from increased hospital care. Essentially the flawed auction program is substituting low cost DME expenses with high cost hospital care. In contrast, an auction recommended by experts that selects the efficient suppliers and pays leastcost sustainable prices will reduce Medicare total costs and avoid expensive cost shifting from low cost services to high cost services. Congress and CMS should stop the implementation of the Round 1 Rebid and move quickly to address the auction design flaws before the program is scaled up to the entire nation. An auction properly designed by experts would avoid the flaws observed today. 1 Professor of Economics, University of Maryland. My research on Medicare auctions is available at care. I thank Thomas Milam and Pacharasut Sujarittanonta for their assistance with this research. I thank the National Science Foundation for support. 1

2 Analysis This paper provides an analysis of the Medicare auction for durable medical equipment using data on claims and outcomes following the start of auction determined supply contracts. The pilot auction, referred to as the Round 1 Rebid, covered nine product categories in nine cities. It was held in November 29, winners were announced in November 21, and the supply contracts began on 1 January 211. Understanding the impact of the pilot auction is important as CMS intends to extend the approach to the entire country in future years. The analysis is based on four data sources. The first data source is the Contract Supplier lists (the winners in the auction), which CMS released to the public in November 21, nearly one year after the bids were submitted. Revised lists were posted periodically in 211 as businesses went out of business or were sold. I use the revised list of 2 December 211 as the contract suppliers in 211. This consists of nine pdf files, one for each region in the auction, listing the name, address, and phone number of each of the suppliers that signed contracts with CMS to supply at the prices determined in the Round 1 Rebid in the particular region and product category. Any supplier not on the list is excluded from supplying the product category in the region. 2 The second data source is the PDAC procedure code utilization data, which I received from PDAC on 13 June 211, as FOIA ad hoc report From this I extract the Medicare claims for each product category in each of the nine regions for 26 to 21. From these two data sources, an earlier study (Cramton 211b) showed how the auction had a dramatic transformative effect. The set of contract suppliers was sharply reduced in number. Often the auction removed many of the largest providers from the market. As a result, for the regions and product categories auctioned, the vast majority of Medicare beneficiaries need to find a new supplier. To get a sense of the difficulties in transitioning to a new supplier, I use two additional data sources. The first is the PDAC procedure code utilization data, which I received from PDAC on 7 December 211, as FOIA ad hoc report This included the Medicare claims for each product category in each of the nine regions from 1 January 211 to 23 September 211. The claims are coded by date of service to assure that all claims are under the terms of the auction pilot. The second data source is from CMS public access files, The data show the health outcomes for those utilizing the Medicare equipment and for those who do not. In this way we can measure the changes in health outcomes as a result of any decline in utilization. The analysis shows for each product category the number of suppliers by year from 26 to 211. It then shows the number of suppliers for each region and product category. I also show the number of 2 Some categories allow Medicare beneficiaries to continue with their current suppliers for a transitional period under a grandfathering clause. 2

3 submitted claims by year. Finally, I show the change in health outcomes in 211 (through September) for those utilizing the Medicare equipment and those who do not. Not surprisingly, the analysis in the following figures shows a dramatic reduction in suppliers in 211 as a result of the Medicare auction. However, what is surprising is the substantial reduction in Medicare DME submitted claims in 211. To make the data comparable across years and recognizing that the 211 submitted claims data is only through 23 September 211, I scale up the number of 211 submitted claims by 365/ In all cases we see a sharp reduction in submitted claims in 211. The drop in submitted claims together with the decline in Medicare prices means an even larger drop in Medicare DME reimbursements an apparent program savings. However, we must recognize that utilization of the Medicare DME program has important health benefits and serves to reduce Medicare expenses in other programs. These benefits from utilization are lost if utilization declines, as must be the case given the substantial drop in claims. Indeed, the CMS data through September 211 show the impact of declines in utilization of Medicare DME. In all cases, the result is a higher risk of death, a higher frequency of ER visits and hospitalization, and longer hospital stays. Since the costs of ER and hospital visits are several orders of magnitude higher than the Medicare DME costs, it seems clear that these hidden costs of the pilot auction system increase overall Medicare costs despite the Medicare DME savings. The decline in Medicare DME utilization would appear to be the result of the flawed auction design. The approach leads to the elimination of efficient providers and to prices that are below costs. Cramton et al. (211) use auction theory to demonstrate the exceptionally poor performance characteristics of the CMS auction design. Merlob et al. (211) shows that these theoretic problems with the CMS auction design are observed in a dramatic fashion in the experimental laboratory. As a result, Medicare beneficiaries find it increasingly difficult to secure the quality supplies they need. More beneficiaries end up in the emergency room or the hospital at much greater cost to CMS and the American taxpayer. In contrast, an efficient auction would identify the efficient providers and sustainable market prices. The selected providers would have strong incentives to provide quality Medicare equipment and utilization would not fall. The results presented here are consistent with the Medicare auction problems discussed in Cramton and Katzman (21b). These problems were brought to the attention of Congress and CMS in the Letter from 167 Concerned Auction Experts on Medicare Competitive Bidding Program. A follow up Letter from 244 Concerned Auction Experts on the Medicare Competitive Bidding Program was sent to President Obama on 17 June If there is a lag between the date of service and the date of receipt by CMS, then I would be underreporting 211 claims by the length of the lag. For example, if the average lag between date of service and receipt by CMS is 3 days, then I should scale up claims by 365/(266 3) = 365/236. The size of the reductions in claims is so large that it seems implausible that this could be the result of long lags in the receipt of claims. 3

4 Conclusion Although the evidence from the field is still preliminary, the analysis of the data presented here suggests that the flaws identified in theory, experiment, and practice, are very much present in the pilot. Congress and CMS should move quickly to stop the implementation of the Round 1 Rebid and move to design and implement an efficient auction for durable medical equipment. The draft proposal presented in Cramton (211a) provides a useful starting point. Failure to act will result in needless harm to millions of Medicare beneficiaries and thousands of Medicare suppliers. Taxpayers, rather than seeing net cost reductions as with an efficient auction, will see substantial cost increases as Medicare costs simply shift to higher cost programs. References Cramton, Peter (211a), Auction Design for Medicare Durable Medical Equipment, Working Paper, University of Maryland, March 211. Cramton, Peter (211b), Medicare Auction Failure: Early Evidence from the Round 1 Rebid, Working Paper, University of Maryland, June 211. Cramton, Peter, Sean Ellermeyer and Brett E. Katzman (211), "Designed to Fail: The Medicare Auction for Durable Medical Equipment" Working Paper, University of Maryland, August 211. Cramton, Peter and Brett E. Katzman (21b), "Reducing Healthcare Costs Requires Good Market Design," The Economists' Voice, 7:4, October 21. Letter from 167 Concerned Auction Experts on Medicare Competitive Bidding Program to Chairman Stark, Health Subcommittee, Ways and Means, U.S. House of Representatives, 26 September 21. Letter from 244 Concerned Auction Experts on the Medicare Competitive Bidding Program to President Obama, the White House, 17 June 211. Merlob, Brian, Charles R. Plott, and Yuanjun Zhang, The CMS Auction: Experimental Studies of a Median Bid Procurement Auction with Non Binding Bids, Working Paper, California Institute of Technology, August 211. Figures The figures presenting the analysis follow in three sets: 1. The number of suppliers from 26 to 211. This shows the substantial drop in the number of suppliers in each product category as a result of the competitive bidding program (in year 211). The number of suppliers is then shown for each product category and competitive bidding area. This shows that the reduction in 211 is seen in each competitive bidding area. 2. The number of submitted claims from 26 to 211. This shows the substantial drop in the number of submitted claims in each product category and competitive bidding area as a result of the competitive bidding program. 3. The health outcomes in 211 for those utilizing a particular DME product and those not utilizing the DME product. This shows the benefit of DME product utilization in terms of improved health outcomes, and shows the costs from non utilization if access to the DME product is restricted. 4

5 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs ,437 1,476 1, , , Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 5

6 Number of suppliers from 26 to 211: CPAP Devices ,343 1,387 1, , , Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 6

7 Number of suppliers from 26 to 211: Diabetic Supplies Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 7

8 Number of suppliers from 26 to 211: Enteral Nutrients Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 8

9 Number of suppliers from 26 to 211: Hospital Beds 18 1,784 1,783 1, ,552 1, , Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 9

10 Number of suppliers from 26 to 211: Oxygen Supplies ,349 1,396 1,482 1,494 1, Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 1

11 Number of suppliers from 26 to 211: Standard Power Wheelchairs 16 1,563 1, , , , Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 11

12 Number of suppliers from 26 to 211: Support Surfaces Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 12

13 Number of suppliers from 26 to 211: Walkers 2, , ,996 2,89 2, Supplier type Non-contract supplier with claims submitted in at least one CBA Contract supplier without claims submitted in any CBA Contract supplier with claims submitted at least one CBA Has claims submitted in at least one CBA 13

14 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 14

15 Number of suppliers from 26 to 211: CPAP Devices in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 15

16 Number of suppliers from 26 to 211: Diabetic Supplies in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 16

17 Number of suppliers from 26 to 211: Enteral Nutrients in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 17

18 Number of suppliers from 26 to 211: Hospital Beds in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 18

19 Number of suppliers from 26 to 211: Oxygen Supplies in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 19

20 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 2

21 Number of suppliers from 26 to 211: Walkers in Charlotte-Gastonia-Concord, NC-SC Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 21

22 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 22

23 Number of suppliers from 26 to 211: CPAP Devices in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 23

24 Number of suppliers from 26 to 211: Diabetic Supplies in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 24

25 Number of suppliers from 26 to 211: Enteral Nutrients in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 25

26 Number of suppliers from 26 to 211: Hospital Beds in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 26

27 Number of suppliers from 26 to 211: Oxygen Supplies in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 27

28 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 28

29 Number of suppliers from 26 to 211: Walkers in Cincinnati-Middletown, OH-KY-IN Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 29

30 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 3

31 Number of suppliers from 26 to 211: CPAP Devices in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 31

32 Number of suppliers from 26 to 211: Diabetic Supplies in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 32

33 Number of suppliers from 26 to 211: Enteral Nutrients in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 33

34 Number of suppliers from 26 to 211: Hospital Beds in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 34

35 Number of suppliers from 26 to 211: Oxygen Supplies in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 35

36 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 36

37 Number of suppliers from 26 to 211: Walkers in Cleveland-Elyria-Mentor, OH Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 37

38 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 38

39 Number of suppliers from 26 to 211: CPAP Devices in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 39

40 Number of suppliers from 26 to 211: Diabetic Supplies in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 4

41 Number of suppliers from 26 to 211: Enteral Nutrients in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 41

42 Number of suppliers from 26 to 211: Hospital Beds in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 42

43 Number of suppliers from 26 to 211: Oxygen Supplies in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 43

44 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 44

45 Number of suppliers from 26 to 211: Walkers in Dallas-Fort Worth-Arlington, TX Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 45

46 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 46

47 Number of suppliers from 26 to 211: CPAP Devices in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 47

48 Number of suppliers from 26 to 211: Diabetic Supplies in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 48

49 Number of suppliers from 26 to 211: Enteral Nutrients in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 49

50 Number of suppliers from 26 to 211: Hospital Beds in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 5

51 Number of suppliers from 26 to 211: Oxygen Supplies in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 51

52 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 52

53 Number of suppliers from 26 to 211: Walkers in Kansas City, MO-KS Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 53

54 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 54

55 Number of suppliers from 26 to 211: CPAP Devices in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 55

56 Number of suppliers from 26 to 211: Diabetic Supplies in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 56

57 Number of suppliers from 26 to 211: Enteral Nutrients in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 57

58 Number of suppliers from 26 to 211: Hospital Beds in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 58

59 Number of suppliers from 26 to 211: Oxygen Supplies in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 59

60 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 6

61 Number of suppliers from 26 to 211: Support Surfaces in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 61

62 Number of suppliers from 26 to 211: Walkers in Miami-Fort Lauderdale-Pompano Beach, FL Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 62

63 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 63

64 Number of suppliers from 26 to 211: CPAP Devices in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 64

65 Number of suppliers from 26 to 211: Diabetic Supplies in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 65

66 Number of suppliers from 26 to 211: Enteral Nutrients in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 66

67 Number of suppliers from 26 to 211: Hospital Beds in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 67

68 Number of suppliers from 26 to 211: Oxygen Supplies in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 68

69 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 69

70 Number of suppliers from 26 to 211: Walkers in Orlando-Kissimmee, FL Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 7

71 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 71

72 Number of suppliers from 26 to 211: CPAP Devices in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 72

73 Number of suppliers from 26 to 211: Diabetic Supplies in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 73

74 Number of suppliers from 26 to 211: Enteral Nutrients in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 74

75 Number of suppliers from 26 to 211: Hospital Beds in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 75

76 Number of suppliers from 26 to 211: Oxygen Supplies in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 76

77 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 77

78 Number of suppliers from 26 to 211: Walkers in Pittsburgh, PA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 78

79 Number of suppliers from 26 to 211: Complex Rehabilitative Power Wheelchairs in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 79

80 Number of suppliers from 26 to 211: CPAP Devices in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 8

81 Number of suppliers from 26 to 211: Diabetic Supplies in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 81

82 Number of suppliers from 26 to 211: Enteral Nutrients in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 82

83 Number of suppliers from 26 to 211: Hospital Beds in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier with claims submitted Has claims submitted 83

84 Number of suppliers from 26 to 211: Oxygen Supplies in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 84

85 Number of suppliers from 26 to 211: Standard Power Wheelchairs in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 85

86 Number of suppliers from 26 to 211: Walkers in Riverside-San Bernardino-Ontario, CA Supplier type Non-contract supplier with claims submitted Contract supplier without claims submitted Contract supplier with claims submitted Has claims submitted 86

87 Number of claims from 26 to 211: Complex Rehabilitative Power Wheelchairs in Charlotte-Gastonia-Concord, NC-SC 1K 97,694 9K 8K 75,335 84,23 82,127 7K 67,68 6K 5K 4K 3K 2K 14,213 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 87

88 Number of claims from 26 to 211: CPAP Devices in Charlotte-Gastonia-Concord, NC-SC 2K 193,972 23,19 18K 175,645 16K 156,9 14K 126,799 12K 1K 8K 84,629 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 88

89 Number of claims from 26 to 211: Diabetic Supplies in Charlotte-Gastonia-Concord, NC-SC 2K 21, ,878 18K 16K 164,51 14K 12K 1K 8K 6K 65,967 6,81 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 89

90 Number of claims from 26 to 211: Enteral Nutrients in Charlotte-Gastonia-Concord, NC-SC 38K 36K 36,986 34K 32K 3K 31,824 3,48 29,94 28K 27,157 26K 24K 22K 2K 18K 16K 14K 12K 1K 9,745 8K 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 9

91 Number of claims from 26 to 211: Hospital Beds in Charlotte-Gastonia-Concord, NC-SC 4K 39,141 38,358 37,692 35K 35,162 36,23 3K 25K 2K 15K 12,48 1K 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 91

92 Number of claims from 26 to 211: Oxygen Supplies in Charlotte-Gastonia-Concord, NC-SC 3K 285,585 28K 26K 271, , , ,841 24K 22K 2K 18K 16K 14K 12K 1K 1,279 8K 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 92

93 Number of claims from 26 to 211: Standard Power Wheelchairs in Charlotte-Gastonia-Concord, NC-SC 1K 98,659 9K 85,597 83,526 8K 77,77 7K 67,113 6K 5K 4K 3K 2K 14,81 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 93

94 Number of claims from 26 to 211: Walkers in Charlotte-Gastonia-Concord, NC-SC 17K 16K 15K 15,235 16,278 15,923 15,425 16,689 14K 13K 12K 11K 1K 9K 8K 7K 6K 5,744 5K 4K 3K 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 94

95 Number of claims from 26 to 211: Complex Rehabilitative Power Wheelchairs in Cincinnati-Middletown, OH-KY-IN 45K 44,71 4K 38,11 35K 3K 28,439 29,775 3,871 25K 2K 15K 1K 7,262 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 95

96 Number of claims from 26 to 211: CPAP Devices in Cincinnati-Middletown, OH-KY-IN 14K 136,544 13K 13,53 12K 11K 16,34 19,969 1K 9K 87,352 8K 7K 6K 5K 49,157 4K 3K 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 96

97 Number of claims from 26 to 211: Diabetic Supplies in Cincinnati-Middletown, OH-KY-IN 17K 16K 157, ,187 15K 14K 142,233 13K 12K 11K 1K 9K 8K 7K 6K 6,387 5K 4K 41,426 3K 2K 1K K -1K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 97

98 Number of claims from 26 to 211: Enteral Nutrients in Cincinnati-Middletown, OH-KY-IN 36K 34K 34,437 33,419 34,48 34,159 32K 32,98 3K 28K 26K 24K 22K 2K 18K 16K 14K 12K 1K 1,511 8K 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 98

99 Number of claims from 26 to 211: Hospital Beds in Cincinnati-Middletown, OH-KY-IN 38K 36K 36,196 34,835 34K 32K 31,421 32,641 33,593 3K 28K 26K 24K 22K 2K 18K 16K 14K 12K 12,267 1K 8K 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 99

100 Number of claims from 26 to 211: Oxygen Supplies in Cincinnati-Middletown, OH-KY-IN 34K 32K 318,52 31,476 3K 293,581 28K 275, ,752 26K 24K 22K 2K 18K 16K 14K 12K 1K 12,314 8K 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 1

101 Number of claims from 26 to 211: Standard Power Wheelchairs in Cincinnati-Middletown, OH-KY-IN 45K 46,1 4K 4,348 35K 31,716 32,751 3K 28,24 25K 2K 15K 1K 8,144 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 11

102 Number of claims from 26 to 211: Walkers in Cincinnati-Middletown, OH-KY-IN 19K 18K 17K 17,894 17, 16,568 17,224 16,54 16K 15K 14K 13K 12K 11K 1K 9K 8K 7K 6K 5K 4K 4,222 3K 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 12

103 Number of claims from 26 to 211: Complex Rehabilitative Power Wheelchairs in Cleveland-Elyria-Mentor, OH 5K 49,434 48,84 45K 42,729 44,24 4K 38,753 35K 3K 25K 2K 15K 1K 9,839 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 13

104 Number of claims from 26 to 211: CPAP Devices in Cleveland-Elyria-Mentor, OH 15K 148,33 14K 136,314 13K 12K 118,66 121,412 11K 1K 9K 93,655 8K 7K 6K 57,337 5K 4K 3K 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 14

105 Number of claims from 26 to 211: Diabetic Supplies in Cleveland-Elyria-Mentor, OH 18K 17K 173, ,475 16K 159,21 15K 14K 13K 12K 11K 1K 9K 8K 7K 6K 64,792 5K 48,353 4K 3K 2K 1K K -1K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 15

106 Number of claims from 26 to 211: Enteral Nutrients in Cleveland-Elyria-Mentor, OH 55K 53,742 5K 46,295 47,226 48,236 46,265 45K 4K 35K 3K 25K 2K 16,726 15K 1K 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 16

107 Number of claims from 26 to 211: Hospital Beds in Cleveland-Elyria-Mentor, OH 5K 5,172 46,659 45K 44,44 42,7 43,215 4K 35K 3K 25K 2K 18,881 15K 1K 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 17

108 Number of claims from 26 to 211: Oxygen Supplies in Cleveland-Elyria-Mentor, OH 4K 367, ,428 35K 351,371 33,75 333,328 3K 25K 2K 15K 136,76 1K 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 18

109 Number of claims from 26 to 211: Standard Power Wheelchairs in Cleveland-Elyria-Mentor, OH 5K 48,844 49,878 45K 43,595 45,162 4K 39,631 35K 3K 25K 2K 15K 1K 1,466 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 19

110 Number of claims from 26 to 211: Walkers in Cleveland-Elyria-Mentor, OH 26K 24K 24,733 24,535 22,96 22K 21,757 21,692 2K 18K 16K 14K 12K 1K 8K 6,722 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 11

111 Number of claims from 26 to 211: Complex Rehabilitative Power Wheelchairs in Dallas-Fort Worth-Arlington, TX 14K 13K 13, ,916 12K 121,18 11K 14,861 1K 98,469 9K 8K 7K 6K 5K 4K 3K 22,941 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 111

112 Number of claims from 26 to 211: CPAP Devices in Dallas-Fort Worth-Arlington, TX 38K 36K 356,81 34K 32K 322,748 33,61 3K 28K 282,989 26K 25,165 24K 22K 2K 18K 16K 14K 128,936 12K 1K 8K 6K 4K 2K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 112

113 Number of claims from 26 to 211: Diabetic Supplies in Dallas-Fort Worth-Arlington, TX 4K 379,992 35K 351,64 3K 39,24 25K 2K 15K 126,99 1K 16,447 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 113

114 Number of claims from 26 to 211: Enteral Nutrients in Dallas-Fort Worth-Arlington, TX 1K 92,56 93,599 98,286 96,463 9K 83,151 8K 7K 6K 5K 4K 33,553 3K 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 114

115 Number of claims from 26 to 211: Hospital Beds in Dallas-Fort Worth-Arlington, TX 12K 116, ,88 11K 111,29 11,238 19,553 1K 9K 8K 7K 6K 5K 4K 42,147 3K 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 115

116 Number of claims from 26 to 211: Oxygen Supplies in Dallas-Fort Worth-Arlington, TX 85K 817,12 8K 75K 7K 746, ,43 727, ,355 65K 6K 55K 5K 45K 4K 35K 3K 285,613 25K 2K 15K 1K 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 116

117 Number of claims from 26 to 211: Standard Power Wheelchairs in Dallas-Fort Worth-Arlington, TX 15K 14K 141, ,659 13K 131,322 12K 11K 1K 14,78 15,666 9K 8K 7K 6K 5K 4K 3K 25,46 2K 1K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 117

118 Number of claims from 26 to 211: Walkers in Dallas-Fort Worth-Arlington, TX 55K 53,84 53,28 5K 48,41 48,177 5,625 45K 4K 35K 3K 25K 2K 15K 14,153 1K 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 118

119 Number of claims from 26 to 211: Complex Rehabilitative Power Wheelchairs in Kansas City, MO-KS 4K 38,732 35K 34,898 3K 27,277 27,58 25K 21,89 2K 15K 1K 7,111 5K K Note: The figure in 211 is the annualized number of claims submitted. The actual number of claims is from 1/1/211 to 9/23/211. This actual number of claims is multiplied by 365/266 to get the annualized number of claims. 119