Dive Brief:

• The Centers for Medicare and Medicaid Services has taken non-invasive ventilators, among the most sought-after devices in the coronavirus pandemic, off the list of durable medical equipment in the 2021 competitive bidding program.
• CMS, in its announcement late last week, cited President Donald Trump's exercise of the Defense Production Act and public concern over access to the machines as reasons for the decision. Non-invasive ventilators were due to be included in the program next year for the first time.
• Needham analysts said companies including ResMed, Hillrom and Inogen stand to benefit from the policy shift, given the equipment faced reimbursement cuts as steep as 50% or more had the non-invasive ventilators product category entered the bidding program.

Dive Insight:

With both invasive and non-invasive ventilators in short supply, the president this month invoked the DPA to boost output of the breathing machines in the fight against the COVID-19 pandemic. Six companies were named in the president's order to purchase ventilators: General Electric, Hillrom, Medtronic, ResMed, Philips and Vyaire Medical.

Many companies, from Medtronic and GE to Getinge and Zoll Medical, had already pledged to ramp up ventilator manufacturing. Last week, HHS said it would pay Philips about $647 million to supply 43,000 ventilators to the Strategic National Stockpile by the end of the year. Some 2,500 of those are scheduled to ship by the end of May.

General Motors, which is working with Ventec Life Systems to produce ventilators, will receive $489 million from HHS to ship 30,000 of the machines by the end of August, with the first 6,132 expected by early June.

CMS said removing non-invasive ventilators from competitive bidding allows any Medicare-enrolled durable medical equipment supplier to provide any type of ventilator covered under Medicare. A non-invasive ventilator uses an interface such as a mask, in contrast to an invasive interface such as a tracheostomy tube.

The competitive bidding program aims to save Medicare money on durable medical equipment by gradually replacing a standard fee schedule with competition among suppliers that operate in a particular area. CMS determines which items to phase in as part of each round of competition.

Durable medical equipment makers had been lobbying for an exclusion for non-invasive ventilators from the Medicare competitive bidding program before the coronavirus crisis. The American Association for Homecare applauded the decision to remove the equipment from the upcoming bidding round.

Home health providers are working to reduce the burdens hospitals are now facing, said Tom Ryan, the association's CEO.