DUBLIN, Ohio – Cardinal Health says its recent acquisition of Advanced Diabetes Supply (ADS) strengthens its position for a potential Medicare national competitive bidding program that may soon include continuous glucose monitors (CGMs).
In a proposed rule this summer, CMS outlined plans to add CGMs to its next round of competitive bidding.
“We’re the only scaled distributor and provider combined, which gives us a unique capability,” said CEO Jason Hollar during a call on the company’s fourth-quarter and fiscal year results. “That’s important to both the administration and to us—ensuring patients continue to access products that provide tremendous value.”
Cardinal Health completed the ADS acquisition earlier this year, folding it into its at-Home Solutions segment alongside Edgepark, its existing supplies business.
Here are Hollar’s key takeaways on what competitive bidding could mean for CGMs and Cardinal’s strategy in this category:
On potential savings from bidding
CMS has proposed reclassifying CGMs under the frequent and substantial servicing category and including them in a new Remote Item Delivery (RID) Competitive Bidding Program (CBP). The proposed model would shift CGMs to a capped monthly rental that covers devices and supply replacements, with reimbursement potentially dropping to just $4.77 per month, according to stakeholders.
“While CGMs will likely go through competitive bidding, this category is already priced fairly low compared to commercial rates,” Hollar said. “It’s also a concentrated market with just two manufacturers, so the setup is different from prior bidding programs.”
On how much of the business is at stake
Hollar noted that Medicare CGM revenue accounts for less than 15% of at-Home Solutions’ overall sales.
“We feel very confident in the strength of both our product portfolio and our payer mix,” he said. “Our portfolio is diverse, and while the ADS acquisition increased our exposure to government payers, we still see a balanced and resilient mix overall.”
On compliance and fraud prevention
“One of our strengths is operating with strong compliance and processes,” Hollar said. “If pressure increases in this space, we see it as an opportunity to step into an even greater leadership role.”
On advocating for patients
“We’ll be monitoring the situation closely and working with CMS to ensure CGM users are supported,” Hollar added. “Overall, we feel good about where we stand.”
