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Incontinence Products Competitive Bid Initiative: Conclusion

In its role as the state’s bookkeeper and main purchasing agent, the Comptroller’s office is engaged in a continuous effort to ensure Texas receives the highest quality goods and services at the best possible price. As part of this effort, our agency worked with the Texas Health and Human Services Commission (HHSC) to examine Texas Medicaid spending on incontinence supplies. The initiative was tasked with finding opportunities to reduce cost while improving the quality of care received by the state’s Medicaid population. Given the alarmingly growing cost of care and an ever expanding Medicaid population, the primary mission was an important undertaking.

After numerous interviews with key HHSC personnel and subject matter experts, the Comptroller’s office identified four major goals for this initiative:

  • Reduce the cost of Medicaid incontinence supplies;
  • Reduce opportunities for fraud, waste and abuse;
  • Ensure strong product quality standards; and
  • Maintain or expand client access to care.

The Strategic Sourcing Division, of the Comptroller’s office, initially proposed to solicit a Request for Proposal (RFP) to competitively procure incontinence products for Texas Medicaid.

After identifying competitive procurement as a possible solution the state began to conduct open and private meetings with the stakeholder community. The stakeholder community is informally defined as current durable medical equipment (DME) providers, DME manufacturers, advocacy groups and individual Medicaid beneficiaries. The meetings were designed to gather feedback on the possible competitive procurement and to solicit input on alternative solutions to meeting the initiative’s four goals.

The public and private meetings were hosted by the Comptroller’s office and HHSC over an eight month period starting in September 2010. As is typically the case, talking to the stakeholder community proved to be extremely fruitful. The stakeholder community offered both positives and negatives to a competitive procurement. In addition, stakeholders were able to identify many alternatives the state could take to improve the program.

The Comptroller’s office now believes the primary mission can be met without a competitive procurement. As a result of the collaborative effort with the stakeholders, the state was able to develop a number of measures, many of which have already been implemented. These measures will assist the state in meeting the four major goals and are a direct result of the initiative’s efforts.

  1. The initiative identified savings opportunities by benchmarking the fee-for-service (FFS) rates of other states. HHSC has already instituted FFS rate reductions earlier this year. Further rate reductions are also under consideration.
  2. The initiative, with the help of stakeholders, identified the possibility of reducing maximum allowables. HHSC has already instituted a 20 percent reduction in the maximum allowables for diapers, briefs and underpads.
  3. The initiative, with the help of the stakeholder community, identified several measures that can help reduce fraud in the program. HHSC has already begun analyzing its ability to implement new requirements such as accreditation and surety bonds. All measures are designed to reduce opportunities for fraud by dissuading unethical vendors from entering the market.
  4. The initiative identified the need for product quality standards. The state is currently participating in a national council to develop uniform performance measurements for all state Medicaid programs.
  5. The initiative recognized the importance of maintaining access to care for Medicaid beneficiaries. The Comptroller’s office also believes that access to care may actually be increased with the elimination of unethical vendors from the Medicaid program through proposed enrollment requirements.

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