Fact Sheets

NEXT STEPS FOR THE MEDICARE DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES (DMEPOS)

Overview

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), enacted on July 15, 2008, made limited changes to the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program, including a requirement that competition to re-bid Round One occur in 2009.  On January 16, 2009, the Centers for Medicare & Medicaid Services (CMS) issued an interim final rule with comment period that incorporates into existing regulations certain provisions of MIPPA related to the DMEPOS competitive bidding program that are self-implementing and necessary to conduct the Round One Rebid competition in 2009.  That rule became effective on April 18, 2009.  To ensure that suppliers have ample time to prepare for the competition, CMS has announced next steps for the program including:

1)  The general timeline for the bidder registration period this summer before

      bidding opens in the fall;

2)  A June 4 meeting of the DMEPOS competitive bidding Program Advisory and

                  Oversight Committee (PAOC); and

3)   Key steps suppliers need to take to get ready for registration and bidding  

                  including getting appropriate State licenses, updating Medicare enrollment 

                  files with the National Supplier Clearinghouse (NSC) and getting accredited and bonded. 

Background

The Medicare DMEPOS Competitive Bidding Program was established by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“Medicare Modernization Act” or “MMA”) to provide important benefits to Medicare beneficiaries and taxpayers, including lowering out-of-pocket costs and generating savings for the Medicare program.   Under this program, bids submitted by DMEPOS suppliers are evaluated so that suppliers that are awarded contracts will ensure access to certain DMEPOS items and services and enhance quality and customer service for Medicare beneficiaries.   CMS uses the bids to establish payment amounts for competitively bid DMEPOS items in competitive bidding areas.

Under the MMA, DMEPOS competitive bidding programs were to be phased into the Medicare program so that competition under the program was to occur in 10 areas in 2007.   Consistent with the statutory mandate, CMS conducted the Round One competition in 10 competitive bidding areas and 10 product categories of DMEPOS and successfully implemented the program on July 1, 2008.   The program’s single payment amounts resulted in a projected savings of approximately 26 percent compared to the traditional Medicare fee schedule. This indicated substantial savings for Medicare beneficiaries and taxpayers.

MIPPA delays competition under the program and terminated the competitive bidding contracts that were awarded following the Round One competition.  As a result, payment for competitively bid items and services was effectively reinstated to the Medicare fee schedule amount.

The interim final rule released on January 16, 2009 implements certain provisions of MIPPA, which affect the Round One Rebid of the Medicare DMEPOS competitive bidding program, and includes:

• The announcement of the competitive bidding program delay:
  • MIPPA delayed the competitions for Rounds One and Two from 2007 and 2009 to 2009 and 2011, respectively;
  • Competition in additional areas is delayed until after 2011;
  • Competition for a national mail order program for beneficiaries who choose to have certain items shipped directly to their homes is delayed until after 2010;
• The exclusion of negative pressure wound therapy as a competitively bid item and Puerto Rico as an area in the 2009 Round One Rebid;
• The exclusion of group 3 complex rehabilitative power wheelchairs from the competitive bidding program;
• The financial document review process, otherwise known as the covered document review process, to identify any missing financial documents from the bid submission;
• The requirement for contract suppliers to disclose to CMS subcontracting relationships; and
• An exemption from the program for hospitals, similar to the exemption for physicians and non-physician practitioners, furnishing certain durable medical equipment.

NEXT STEPS FOR THE DMEPOS COMPETITIVE BIDDING PROGRAM

To ensure that suppliers have ample time to prepare, CMS has announced the following next steps for the program:

SPRING 2009

• CMS BEGINS A PRE-BIDDING SUPPLIER AWARENESS CAMPAIGN
• PROGRAM ADVISORY AND OVERSIGHT COMMITTEE (PAOC) MEETING ON JUNE 4, 2009

SUMMER 2009

• CMS ANNOUNCES THE BIDDING SCHEDULE AND THE SCHEDULE OF SUPPLIER EDUCATION EVENTS

• CMS BEGINS BIDDER EDUCATION CAMPAIGN
• BIDDER REGISTRATION PERIOD TO OBTAIN USER IDS AND PASSWORDS BEGINS

FALL 2009

• SUPPLIER BID WINDOW OPENS

Suppliers wishing to participate in the Round One Rebid of the Medicare DMEPOS competitive bidding program, including suppliers that were awarded contracts in the first Round One which occurred in 2007, will need to re-register and submit a new bid application for the Round One Rebid competition that will occur in 2009.   As in the first Round One program, suppliers must meet all applicable eligibility, financial, quality, and accreditation standards in order to be awarded a contract.   Suppliers interested in bidding should prepare now by ensuring that their enrollment files at the National Supplier Clearinghouse (NSC) are up-to-date and that they obtain all required state licenses for the items, and in the areas, for which they wish to bid.

In addition, CMS would like to remind DMEPOS suppliers again that time is running out to obtain accreditation by the September 30, 2009 deadline or risk having their Medicare Part B billing privileges revoked on October 1, 2009.   Accreditation takes an average of 6 months to complete.  It is very important for DMEPOS suppliers to contact an accreditation organization right away to obtain information about the accreditation process and submit an application.  Suppliers must be accredited for a product category in order to submit a bid for that product category.  CMS cannot contract with suppliers that are not accredited by a CMS-deemed accreditation organization.  Further information on the DMEPOS accreditation requirements, along with a list of the accreditation organizations and those professionals and other persons exempted from accreditation, may be found at the CMS Web site at:  http://www.cms.hhs.gov/MedicareProviderSupEnroll/01_Overview.asp.

CMS would also like to remind DMEPOS suppliers that certain suppliers will need to obtain and submit a surety bond to the NSC by the October 2, 2009 deadline or risk having their Medicare Part B billing privileges revoked.   Suppliers subject to the bonding requirement must be bonded in order to bid in the DMEPOS competitive bidding program.  A list of sureties from which a bond can be secured is found at the Department of the Treasury’s “List of Certified (Surety Bond) Companies” and the Web site is located at: www.fms.treas.gov/c570/c570_a-z.html.

ROUND ONE REBID AREAS AND PRODUCT CATEGORIES

The Round One Rebid will occur in the following MSAs (same as the first Round 1 except Puerto Rico is excluded):

• Cincinnati – Middletown (Ohio , Kentucky and Indiana)

• Cleveland – Elyria – Mentor (Ohio)

• Charlotte – Gastonia – Concord (North Carolina and South Carolina)

• Dallas – Fort Worth – Arlington (Texas)

• Kansas City (Missouri and Kansas)

• Miami – Fort Lauderdale – Miami Beach (Florida )

• Orlando (Florida)

• Pittsburgh (Pennsylvania)

• Riverside – San Bernadino – Ontario (California)

The Round One Rebid will include the following product categories (same as the first Round 1 except negative pressure wound therapy items and group 3 complex rehabilitative power wheelchairs are excluded):

• Oxygen and Oxygen Equipment

• Standard Power Wheelchairs, Scooters, and Related Accessories

• Complex Rehabilitative Power Wheelchairs and Related Accessories (Group 2 only)

• Mail-Order Replacement Diabetic Supplies

• Enteral Nutrients, Equipment and Supplies

• Continuous Positive Airway Pressure (CPAP) machines, Respiratory Assist Devices (RADs), and Related Supplies and Accessories

• Hospital Beds and Related Accessories

• Walkers and Related Accessories

• Support Surfaces (Group 2 mattresses and overlays) (in Miami only)

ADDITIONAL INFORMATION

For additional information about the Medicare DMEPOS Competitive Bidding Program, please visit:  http://www.cms.hhs.gov/DMEPOSCompetitiveBid/

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