CHANGES TO THE COMPETITIVE BIDDING PROGRAM FOR CERTAIN DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES
(CMS 1561-IFC)

Overview

 

The Medicare Improvements for Patients and Providers Act (MIPPA), enacted on July 15, 2008, made limited changes to the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program.  Certain changes to this program are addressed in the Interim Final Rule with Comment Period that was announced today.  CMS will be implementing in other rulemaking or sub regulatory guidance those provisions of the legislation that do not affect the rebidding of Round 1 and will announce additional information as it becomes available.

 

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 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. These bids are used to establish single payment amounts for certain DMEPOS items in competitive bidding areas (CBAs). Under the MMA, competitive bidding programs were to be phased into the Medicare program beginning in 2007.  CMS began competition for Round 1 in 10 Metropolitan Statistical Areas (MSAs) and 10 product categories of DMEPOS and successfully implemented the program on July 1, 2008.  Medicare’s single payment amounts resulted in a projected savings of approximately 26 percent compared to the traditional Medicare fee schedule. This provided substantial savings for Medicare beneficiaries and taxpayers.

 

The Competitive Bidding Program was delayed by the passage of MIPPA.  As a result, the contracts with DMEPOS suppliers under the program were terminated, and the payment for competitively bid items and services was reinstated to the Medicare fee schedule amount.

 

This Interim Final Rule with Comment Period implements certain provisions of MIPPA which affect the Medicare DMEPOS Competitive Bidding Program.  In particular, it addresses the delay of Rounds 1 and 2 of the program. This rule also includes the following:

 

• Excludes certain areas and items and services from the competitive bidding program;
• Establishes a “covered document” review process for providing feedback to suppliers regarding missing financial documents;
• Requires DMEPOS suppliers that are awarded a contract under the program to disclose to CMS information regarding subcontracting relationships; and
• Makes an exemption to the competitive bidding program for certain providers.

 

Delay of the Medicare DMEPOS Competitive Bidding Program

 

MIPPA delayed the competition for Rounds 1 and 2 from 2007 and 2009 to 2009 and 2011, respectively. Competition for a national mail order program is delayed until after 2010 and competition in additional areas, other than mail order, is delayed until after 2011.  The competition for Rounds 1 and 2 must be for the same MSAs and items and services as were previously selected by CMS.  However, Puerto Rico and negative pressure wound therapy are excluded from the Round 1 rebid, and group 3 complex rehabilitative power wheelchairs are permanently excluded.  MSAs and items and services that will be included in the Round 1 rebid are identified in this rule.

 

Round 1 rebid will occur in the following MSAs:

 

• 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)

Round 1 rebid will include the following product categories:

• Oxygen Supplies and Equipment

• Standard Power Wheelchairs, Scooters, and Related Accessories

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

• Mail-Order Diabetic Supplies

• Enteral Nutrients, Equipment and Supplies

• CPAP, RADs, and Related Supplies and Accessories

• Hospital Beds and Related Accessories

• Walkers and Related Accessories

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

Suppliers wishing to participate in the Round 1 rebid Medicare DMEPOS Competitive Bidding Program, including suppliers that were awarded contracts in the first Round 1 which occurred in 2007, will need to submit a new bid application for the Round 1 rebid competition that will occur in 2009. As in the first Round 1 program, suppliers will still be expected to meet all applicable eligibility, financial, quality, and accreditation standards.

 

Feedback on Missing Financial Documents

 

Suppliers that submit financial documents within a specified time period will be notified by CMS of any missing financial documentation. This notice does not include a review of the accuracy of the documents submitted or whether the documents meet applicable requirements.  It only applies to the receipt of the documents.  These financial document requirements will be detailed in the Request for Bids (RFB).

 

Documents must be received by the later of (1) the date that is 30 days before the final date for the closing of the bidding window or (2) the date that is 30 days after the opening of the bid window.  For example, for a 60 day bid window the last date to submit documents and receive a notice of any missing documents would be the later of: (1) 30 days before the final date of the bid window or (2) 30 days after the beginning of the bid window.

 

This period, as defined by MIPPA and in the Interim Final Rule with Comment Period, is called the “covered document review date.”  In the 2009 Round 1 rebid, CMS will provide notification of missing financial documents within 45 days after the end of the covered document review date to those suppliers that submit their financial documents under this timeframe.  For all subsequent rounds of competition, CMS will have 90 days after the end of the covered document review date to provide this notification.  Once suppliers are notified of the missing document(s), suppliers have 10 business days from the date of the notice to submit the missing document(s).

 

Disclosing Information on Subcontracting Relationships

 

A supplier that is awarded a contract under the Medicare DMEPOS Competitive Bidding Program must provide information to CMS on each subcontracting arrangement the supplier has to furnish items and services under the contract.  The supplier must also provide information on whether each subcontractor meets accreditation requirements, if applicable to the subcontractor.  The supplier must provide all of this information within 10 days after the supplier enters into the contract with CMS under the program.  If the supplier enters into a subcontracting relationship after being awarded a contract under the competitive bidding program, the supplier has 10 days from entering into the subcontracting relationship to provide this information to CMS.

 

Exemption from Competitive Bidding for Certain Durable Medical Equipment (DME)

 

MIPPA requires an exemption for certain DME when furnished by a hospital to its own patients during an admission or on the date of discharge.  This exemption applies to the same items that are exempt when furnished by physicians to their own patients as part of their professional services.  These items are crutches, walkers, canes, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME.  Services provided under this exemption will be paid at the single payment amount established for the items.

 

CONCLUSION

 

Other than the delay to the program, this regulation only includes provisions that affect the Round 1 rebid of the competitive bidding program. There are other provisions of MIPPA that affect this program that are not addressed in this Interim Final Rule with Comment Period.  Although the competitive bidding program has been delayed and some other limited changes to the program have been made, none of these changes fundamentally alter the nature of the competitive bidding program.  As a result, CMS still expects significant savings for Medicare beneficiaries, the taxpayers and to the Medicare program as well as improved access to quality DMEPOS items and services when the program resumes.

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