June 5, 2008

New Tip Sheets Help Explain New Medicare Competitive Bidding Program

for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies

 

NOTE: This program was delayed by the passage of HR 6331, the Medicare Improvements for Patients and Providers Act (MIPPA), in July 2008.  MIPPA terminates all contracts and requires CMS to rebid the initial 10 areas, and it extends the timeline for expansion to 80 areas until 2011.  For 2009, Medicare payment for items that were to have been subject to this program will be cut 9.5%.

 

Introduction

 

The Center for Medicare Advocacy’s Weekly Alert of May 8, 2008 provides a description of the new Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) competitive bidding program.  On May 20th, the Centers for Medicare & Medicaid Services (CMS) announced the winning suppliers for the first round of the competitive bidding process.  These 325 suppliers (complete list available at http://www.dmecompetitivebid.com/cs) will begin serving the ten first-round competitive bidding areas (CBAs) on July 1, 2008.  CMS is accepting bids for contracts in the 70 second-round CBAs, with the contracts set to begin on January 14, 2009. 

 

The competitive bidding program requires beneficiaries who permanently reside in designated CBAs to obtain competitively bid items from a contract supplier unless an exception applies.  In this instance a recognized exception permits some suppliers to be grandfathered into the process allowing them to continue providing certain rented durable medical equipment (DME) items and services even though they are not contracted suppliers. Further information about the DMEPOS program can be found at http://www.cms.hhs.gov/DMEPOSCompetitiveBid/.

 

Grandfathered Suppliers Tip Sheet

 

On May 28, 2008, CMS published a tip sheet for “Grandfathered Suppliers” under the DMEPOS competitive bidding program.  Grandfathered DMEPOS suppliers are non-contract suppliers that elect to continue to provide certain rented DME or oxygen and oxygen equipment at the time the DMEPOS competitive bidding program begins in a given CBA. The grandfathering exception may also apply to beneficiaries who transition from a Medicare Advantage (MA) plan.  The full tip sheet is available at http://www.cms.hhs.gov/DMEPOSCompetitiveBid/Downloads/DMEPOS_Grandfathered_Suppliers_Tip_Sheet.pdf

An eligible grandfathered suppler is a supplier that was providing certain rented DME, or oxygen and oxygen equipment at the time a competitive bidding program begins in a CBA.  That supplier may elect to become a grandfathered supplier and continue renting DME or oxygen and oxygen equipment to the Medicare beneficiaries to whom they were renting prior to the beginning of the competitive bidding program.

 

Grandfathered items include inexpensive or routinely purchased items provided on a rental basis; items requiring frequent and substantial servicing; oxygen and oxygen equipment (not including oxygen contents, supplies, or accessories furnished for use with beneficiary-owned equipment); and capped rental items provided on a rental basis.

Beneficiaries renting oxygen, oxygen equipment, or DME when the competitive bidding program becomes effective may choose to continue to rent those items from a grandfathered supplier.  They can indicate their choice by responding to the written notification sent by the Grandfathered Supplier.  The notice is to be sent to the beneficiary at least 30 days prior to the start date of the competitive bidding program.  Beneficiaries may elect to change from a Grandfathered Supplier to a contract supplier at any time, and the contract supplier is required to accept the beneficiary as a customer.

Title for oxygen equipment transfers to the beneficiary on the first day following the 36 continuous months during which Medicare payment is made to rent the equipment.  Title to capped rental equipment transfers to the beneficiary on the first day following the 13 continuous months during which Medicare payment is made to rent the equipment.  These transfer-of-title requirements apply to all suppliers without regard to their grandfathered status.

Applicable to all suppliers irrespective of grandfathered status, a supplier that provided capped rental DME that was rented in a month prior to January 1, 2006 is responsible for supplying the equipment and for maintenance and servicing after the 15-month rental period for those beneficiaries that chose the rental option.  

Accessories and supplies may be provided by the same Grandfathered Supplier that provides the items, if they are used in conjunction with and are necessary for the effective use of a grandfathered item.  Payment for these items is based on the single payment amount if the item is a competitively bid item for the CBA in which the beneficiary maintains a permanent residence.  If not a competitively bid item, payment will be made in accordance with the standard payment rules. Accessories and supplies comprise such things as tubes, hoses, and masks with respiratory equipment, and administration sets with infusion pumps.  In addition, accessories and supplies for beneficiary-owned equipment that are competitively bid items must be furnished by a contract supplier.

Referral Agent Tip Sheet

 

Under the DMEPOS competitive bidding program, referral agents include such entities as Medicare-enrolled providers, physicians, treating practitioners, discharge planners, social workers, pharmacists, and home health agencies that refer beneficiaries for services in a CBA. Referral agents have the responsibility to help the Medicare beneficiary select qualified and appropriate DMEPOS suppliers.  Similarly, the referral agent is to be the beneficiary’s initial contact upon receipt of a prescription for a competitively bid item.  They are to assist beneficiaries who reside in a CBA or who are visiting a CBA.   Note that the beneficiary’s choice of treating physician or treating practitioner is not affected by the DMEPOS competitive bidding program. The full referral agent tip sheet is available at http://www.cms.hhs.gov/DMEPOSCompetitiveBid/Downloads/DMEPOS_Referral_Agent_Tip_Sheet.pdf.

A referral agent must determine if the Medicare beneficiary resides in a CBA or will be obtaining a competitively bid item in a CBA.  To do this the referral agent must compare the beneficiary’s ZIP code to the list of ZIP codes for the CBAs, which is available at http://www.dmecompetitivebid.com/Palmetto/Cbic.nsf/docsCat/DMEPOS%20Competitive%20Bidding%20Areas%20Zip%20Codes?opendocument.  If the beneficiary resides in one of the ZIP codes included in a CBA or is visiting a CBA, the referral agent determines if the DMEPOS item to be supplied to the beneficiary is included in any of the competitively bid product categories.  If the DMEPOS item falls into one of the competitively bid product categories, the referral agent informs the beneficiary that it does, and that they need to obtain the item from a contract supplier.  The referral agent is then to refer the beneficiary to the "supplier locator tool," soon to be available at: www.medicare.gov.  In assisting a beneficiary, a referral agent may prescribe, in writing, a particular brand or mode of delivery for a competitively bid item if it is necessary to avoid an adverse medical outcome. The need for this must be documented by the prescribing entity. 

Beneficiaries must obtain competitively bid items of DME and supplies and accessories from a contract-supplier unless an exception, such as a Grandfathered Supplier, exists.  Otherwise, Medicare will not pay for the item.  If an exception does not apply, the beneficiary is not liable for payment unless the non-contract supplier obtains a signed Advance Beneficiary Notice (ABN) from the beneficiary before furnishing the item.

A beneficiary may purchase diabetic testing supplies from a mail order contract supplier for the area in which he or she maintains a permanent residence.  Such supplies may also be purchased from any enrolled Medicare supplier if the diabetic testing supplies are provided at a storefront.  Medicare’s payment, and the beneficiary’s coinsurance, will be less when the diabetic supplies are obtained from a mail order contract supplier.

A beneficiary may obtain repairs and replacements from any Medicare-enrolled supplier.  When base equipment (e.g., wheelchairs or hospital beds) must be replaced in its entirety, the replacement must be obtained from a contract supplier.

Physicians’ and Other Treating Practitioners’ Tip Sheet

 

On May 31, 2008, CMS issued a tip sheet to explain how certain physicians and other treating practitioners can provide certain types of competitively bid items in a CBA to their patients without submitting a bid and being selected as a contract-provider.  As stated above, under the DMEPOS competitive bidding program, beneficiaries residing in designated CBAs must obtain competitively bid items from a contract-supplier, unless an exception applies.  The tip sheet explains the exception for physicians and other treating practitioners who are enrolled Medicare DMEPOS suppliers.

 

Under the exceptions program, these physicians and other treating practitioners can provide certain types of competitively bid items in a CBA to their own patients without submitting a bid and being selected as a contract-supplier.  The exception also includes podiatric physicians, nurse practitioners, physician assistants, and clinical nurse specialists. The physicians’ and other practitioners’ tip sheet can be found at http://www.cms.hhs.gov/DMEPOSCompetitiveBid/downloads/DMEPOS_Physicians_and_Other_Practitioners_Tip_Sheet.pdf.

 

The DMEPOS items that the physicians and other treating practitioners can provide as described above are limited to crutches, canes and walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME.  Note, however, that for the first phase of competitive bidding, effective on July 1, 2008, walkers are the only items of this set for which competitive bidding has been completed.  In addition, these items must be billed to a DME Medicare Administrative Contractor using the DMEPOS billing number that is assigned to the physician, the treating practitioner (if possible), or a group practice to which the physician or treating practitioner has reassigned the right to receive Medicare payment.

Physicians must accept assignment if they provide competitively bid equipment to Medicare patients who reside in a CBA.  Under the Medicare assignment program, participating physicians and suppliers agree to accept the Medicare reasonable charge amount with the beneficiary being responsible for a 20% co-payment.  Physicians and other treating practitioners can determine if a Medicare beneficiary resides permanently in a CBA by comparing the beneficiary’s ZIP code to the list of ZIP codes for the CBAs referred to earlier.

Conclusion

 

The three tip sheets described above provide useful information about the emerging DMEPOS competitive bidding program.  Beneficiaries have expressed confusion as they contemplate the possible need to change suppliers under the DMEPOS competitive bidding program.  Similarly, beneficiaries are uncertain whether they can continue to obtain competitively bid DMEPOS items and supplies from physicians and other practitioners who are enrolled DMEPOS suppliers.    The tip sheets described above provide necessary answers in this emerging environment.  Advocates and beneficiaries should check the DMEPOS website frequently for developments. This website will be an important and on-going resource for understanding the new DMEPOS competitive bidding program.  In addition, the "supplier-locator tool" soon to be added to the Medicare beneficiary website, www.medicare.gov, will be an important source of contract-supplier information.

 

For more information, contact attorney Alfred Chiplin in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760 or achiplin @ medicareadvocacy.org (remove spaces).

Copyright © 2010 Center for Medicare Advocacy, Inc.