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On July 1, 2013, Medicare Part B will implement a national mail-order competitive bidding program specifically for diabetic testing supplies. [1],[2]  The program applies to all zip codes in the 50 United States, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam and American Samoa.[3] Once implemented, beneficiaries in traditional Medicare[4] will purchase diabetic testing supplies using a mail order option or a non-mail order option.[5]  

Included Supplies

Equipment such as blood glucose test strips, lancet devices, lancet, and glucose control solutions for checking the accuracy of testing equipment and test strips and other Medicare Part B covered diabetic testing supplies are included in the national mail-order program.[6]  However, Medicare Part D-covered supplies such as syringes, needles and inhaled insulin devices are not included in the national mail-order program.[7]

Mail-Order Options

Under the national mail-order competitive bid program, traditional Medicare beneficiaries will purchase their diabetic testing supplies through a national mail-order contract supplier ("Mail Order Option") or in person from any Medicare-enrolled supplier of non-Medicare testing supplies ("Non-Mail Order Option"). [8] Mail-order supplies will be shipped directly from the supplier to the beneficiary through a service such as United States Postal Service, Federal Express, the United Parcel Service or a mail-order contract supplier's delivery service.[9] Beneficiaries can find suppliers at http://www.medicare.gov/supplierdirectory/search.html.

Medicare Part B will reimburse mail-order deliveries provided that they are delivered directly from the supplier to a beneficiary's residence.[10]  Beneficiaries who select the Mail-Order Option cannot have diabetic testing supplies shipped to a pharmacy and then have the pharmacy deliver the supplies to the beneficiary.[11] If this is attempted, Medicare Part B will not reimburse the supplier or the pharmacy.[12]

Unfortunately, this means that beneficiaries no longer have the option of delivery from a local vendor even if the local business delivers other items to them.

Congress established strict reimbursement and delivery rules for the purchase and receipt of diabetic testing supplies and made distinctions between mail-order and non-mail order options (both as to cost and access).[13] As discussed below, non-mail order supplies may be more costly to the beneficiary.  Distinguishing between the two options is intended to prevent suppliers who did not win bids (or did not participate in the bidding competition) from circumventing the competitive bidding program[14] and assures that the Medicare program realizes the savings afforded by the competitive bidding program.[15]

Cost

Beneficiaries who purchase diabetic testing supplies using the Mail Order Option or the Non-Mail Order Option may be charged different amounts.[16] Different charges are possible because Mail Order suppliers must accept assignment-based purchases and Non-Mail Order suppliers have the option to accept assignment-based purchases.[17] Non-Mail Order suppliers also have the option to enroll in Medicare.[18] A supplier who accepts assignment-based purchases can charge only the Medicare approved amount for the supplies.[19]  Suppliers who do not accept assignment-based purchases may charge a different amount than suppliers who do accept assignment-based purchases. Suppliers who are not enrolled in Medicare may not bill Medicare for supplies a beneficiary purchases.[20]

A beneficiary's payment will depend on which type of supplier is select.  The four types are:

  1. Mail-Order supplier
  2. Non-Mail-Order supplier, Medicare enrolled and accepts Assignment
  3. Non-Mail-Order supplier, Medicare enrolled and does not accept Assignment
  4. Non-Mail-Order supplier, not Medicare enrolled and does not accept Assignment

A Mail-Order supplier must accept assignment and must be enrolled in Medicare.[21] A beneficiary who purchases supplies from a Mail-Order supplier cannot be charged more than 20% coinsurance and any unmet deductible.[22] For example, a beneficiary purchases $100 worth of diabetic testing supplies based on Medicare's reasonable charge or fee schedule amount. The supplier may charge the beneficiary only $20 (20% coinsurance) and any unmet deductible.

A Non-Mail-Order supplier that is enrolled in Medicare and accepts Assignment cannot charge a beneficiary more than 20% coinsurance and any unmet deductible.[23] This is the same amount that Mail-Order suppliers must charge.  For example, a beneficiary purchases $100 worth of diabetic testing supplies based on Medicare's reasonable charge amount or fee schedule amount. The supplier may charge the beneficiary only $20 (20% coinsurance) and any unmet deductible.

A Non-Mail Order supplier that is enrolled in Medicare who does not accept Assignment is not subject to the limiting charge law (which prohibits suppliers from charging more than 115% above Medicare's reasonable charge or fee schedule amount) [25] and can charge a beneficiary its full rate for the supplies.[24]  Likewise, a Non-Mail Order supplier that is not enrolled in Medicare and who does not accept Assignment is not subject to the limiting charge law.[27]

Beneficiaries receiving Non-Mail-Order supplies should confirm with their vendor (such as a local pharmacy) that they accept Medicare Assignment to ensure that they will not be charged more than Medicare's reasonable charge calculation or fee schedule amount. Beneficiaries receiving Non-Mail-Order supplies should also confirm with their vendor/pharmacy that they are enrolled in Medicare to ensure that Medicare will pay for part of the supplies ordered.

Beneficiary Protections

  • Contract suppliers cannot ask beneficiaries to switch their testing supplies

Medicare's anti-switching rule prohibits national mail-order program contract suppliers from influencing or incentivizing beneficiaries to switch their current glucose monitor and testing supply brands to another brand.[28] Only the beneficiary may initiate an inquiry regarding other testing supply brands.  If, for example, the contract supplier does not carry the beneficiaries testing supply brand, the beneficiary may ask about alternative brands and the contract supplier may describe the alternatives it offers.[29] Beneficiaries with a primary insurance policy (that is not traditional Medicare) may be required to use a supplier that does not participate in Medicare's mail-order program. In such circumstances, Medicare will make a secondary payment to the supplier.[30]

  • Requests for Specific Brands of Diabetic Supplies

A physician or treating practitioner (i.e., a physician assistant, clinical nurse specialist or nurse practitioner) may prescribe a specific brand or mode of delivery to avoid an adverse medical outcome[31]. If this happens, the physician or treating practitioner must add to the beneficiary's medical record: the product's brand name or mode of delivery; the features that this product or mode of delivery has versus other brand name products or modes of delivery, and an explanation of how the features are necessary to avoid an adverse medical outcome.  If the contract supplier does not typically furnish the specific brand or mode of delivery, and does not consult with the physician or treating practitioner for a revised prescription, or find another supplier to furnish the needed item, then the contract supplier must furnish the item as prescribed.[32]

Beneficiaries requesting a specific brand of testing supplies without a prescription cannot be made to switch to another glucose monitor and testing supplies brand by the contract supplier.[33] Contract suppliers must furnish the brand of testing supplies that works with the beneficiary's monitor.[34]

  • Reporting Non-Compliant Suppliers

If a beneficiary receives calls from suppliers from whom they have not previously ordered supplies and feels pressured to switch suppliers, he or she should call 1-800-MEDICARE (1-800-633-4227).[35] Beneficiaries who receive items that they have not ordered, or who receive calls offering free diabetic supplies in the mail should take the following steps:

  1. Should not give one's Medicare number or other personal information to anyone who calls you.
  2. Do not accept items that you did not order.
  3. Refuse the delivery or return it to the sender.
  4. Keep a record of the sender's name and the date you returned the items.
  5. Call the Fraud Hotline of the HHS Office of Inspector General at 1-800-HHS-TIPS (1-800-447-8477).
  • Other Beneficiary Protections

If you do not use a Medicare contract supplier, the supplier may ask you to sign an "Advance Beneficiary Notice".[36]  This notice says Medicare probably will not pay for the item or service.  A beneficiary who signs ABN may be financially liable for the cost of the item.[37], [38]

Conclusion

Advocates will need to explain the two mail-order options to Part B beneficiaries to ensure that beneficiaries are fully informed of their options.  Also, advocates will need to reiterate that those who choose the non-mail order option should call their local pharmacy or other vendor to make sure they accept Medicare assignments.


Additional Diabetic Testing Supply Resources and Information

The following list of resources serves to guide beneficiaries towards resources that may help them pay for diabetic testing supplies and other expenses related to diabetes:


Key Terms[49]

Advance Beneficiary Notice: An advanced beneficiary notice (ABN), CMS-R-131, is a standardized notice a supplier must issue to a Medicare beneficiary before providing certain Medicare Part B or Part A items or services.[50] The provider is required to give beneficiaries an advance beneficiary notice when it provides beneficiaries services or items that they know or have reason to believe Medicare will determine to be medically unnecessary for you, and will not pay for it.[51]

Assignment: The supplier agrees (or is required by law) to accept the Medicare-approved amount as full payment for covered services (with beneficiaries being responsible for a 20 percent copayment and any outstanding Part B deductible).[52]

Anti-Switching Rule: Prohibits contract suppliers from influencing or incentivizing beneficiaries to switch their current glucose monitor and testing supplies to another brand.[53]

Competitive Bidding Program:  A tool to help set appropriate payment amounts for Medicare-covered durable medical equipment, prosthetics, orthotics, and supplies.[54]

Diabetic Testing Supplies: Equipment such as blood glucose test strips, lancet devices, lancet, and glucose control solutions for checking the accuracy of testing equipment and test strips.[55]

DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies): The term "Durable Medical Equipment" includes such things as iron lungs, oxygen tents, hospital beds, and wheelchairs (this may include a power-operated vehicle that may be appropriately used as a wheelchair) used in the patient's home, including an institution used as a home (i.e. nursing home, senior citizen facility), whether furnished on a rental basis or purchased.[56]  DMEPOS also includes blood-testing strips and blood glucose monitors for individuals with diabetes without regard to whether the individual has Type I or Type II diabetes or to the individual's use of insulin.

Fee Schedule Amounts: Calculated on a statewide basis and limited by national ceilings and floors and published by CMS.[57]

Mail-Order: Items shipped or delivered to the beneficiary's residence regardless of the method of delivery.[58]

Medicare-Approved Amount: In traditional Medicare, this is the amount a doctor or supplier that accepts assignment can be paid.  It may be less than the actual amount a doctor or supplier charges.  Medicare pays 80% of the Medicare-approved amount and the beneficiary is responsible for the 20% co-payment amount.[59]

Non-Mail Order: Beneficiaries can pick up their supplies in-person from any Medicare-enrolled supplier of diabetic testing supplies.[60]


Sources:

[1] 42 C.F.R. §414 implements competitive bidding programs for certain DMEPOS items as required by sections 1847(a) and (b) of the Social Security Act (the Act). Sections 1847(a) and (b) were added to the Act due to the  Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA), Public Law 108-173, which mandates Medicare's Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program and required Medicare to establish and implement standards for new competitive bidding orders. The Medicare Improvements for Patient and Providers Act of 2008 (MIPPA), §154, Public Law 110-275, temporarily delayed the Competitive Bidding Program, provided a process for providing feedback to suppliers regarding missing financial documentation and required contract suppliers to disclose to CMS information regarding subcontracting relationships. See http://www.gpo.gov/fdsys/pkg/FR-2013-05-10/pdf/2013-11033.pdf.
[2] See the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[3] See the Competitive Bidding Areas (CBAs): Round 2 competitive bidding areas and National Mail Order Competition, http://www.dmecompetitivebid.com/Palmetto/Cbic.Nsf/files/Rd2_Bidding_CBAs0811.pdf/$File/Rd2_Bidding_CBAs0811.pdf.
[4] Medicare Advantage Plan (such as an HMO or PPO) enrollees should be contacted by their plan if a beneficiaries supplier is changing. Such enrollees should contact their plan for more information.
[5] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013) available at, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[6] Center for Medicare & Medicaid Services, An Overview of Medicare Covered Diabetes Supplies and Services (August 2012) available at http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/se0738.pdf
[7] Center for Medicare & Medicaid Services, Medicare's Coverage of Diabetes Supplies & Services (August 2012), available at http://www.medicare.gov/publications/pubs/pdf/11022.pdf.
[8] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013) available at, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[9] See, https://www.federalregister.gov/articles/2010/11/29/2010-27969/medicare-program-payment-policies-under-the-physician-fee-schedule-and-other-revisions-to-part-b-for for more information on acceptable delivery methods and an expanded interpretation of Mail Order Contract Supplier which includes suppliers who use their own delivery service to deliver supplies to a beneficiary's residence, instead of a service like the United States Postal Service.
[10] Center for Medicare & Medicaid Services, Transmittal 1139, Pub 100-20 (November 2012), available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1139OTN.pdf.
[11] Durable Medical Equipment (DME) National Competitive Bidding (NCB): National Mail Order (NMO) Program Implementation for Diabetic Supplies available at, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8080.pdf.
[12] Center for Medicare & Medicaid Services, Transmittal 1139, Pub 100-20 (November 2012), available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1139OTN.pdf.
[13] 75 Fed. Reg. 73567-73570 (November 29, 2010), available at: https://www.federalregister.gov/articles/2010/11/29/2010-27969/medicare-program-payment-policies-under-the-physician-fee-schedule-and-other-revisions-to-part-b-for.
[14] Id.
[15] Id.
[16] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013) available at, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[17] 42 CFR §414.408(c)
[18] Center for Medicare & Medicaid Services, http://www.medicare.gov/pubs/pdf/11022.pdf
[19] Center for Medicare & Medicaid Services, What does Medicare Part B Cover? Available at: http://www.medicare.gov/what-medicare-covers/part-b/what-medicare-part-b-covers.html
[20] 42 C.F.R. 424.57
[21] 42 CFR §414.408
[22] 42 C.F.R. §414.408(a)
[23] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013) available at, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[24] Center for Medicare & Medicaid Services, An Overview of Medicare Covered Diabetes Supplies and Services (August 2012), available at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/se0738.pdf.
[25] Id.
[26] See 42 U.S.C.§1395u(i)(2)(definition of a non-participating physician and suppler); see also 1395u(h)(1)(asupplier may voluntarily enter into an agreement with  the Secretary to become a participating physician or supplier and accept assignment); and see 42 U.S.C.§1395w-4(g)(2)(defining the liming charge amount.).  In addition, see Congressional Research Service, Medicare Durable Medical Equipment" The Competitive Bidding Program (August 2010), available at: http://heartland.org/sites/all/modules/custom/heartland_migration/files/pdfs/29562.pdf
[27] See 42 U.S.C.§1395u(i)(2)(definition of non-participating physician and suppler); see also 1395u(h)(1)(a supplier may voluntarily enter into an agreement with  the Secretary to become a participating physician or supplier and accept assignment); and see 42 U.S.C.§1395w-4(g)(2)(defining the liming charge amount.). 
[28] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013), available at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[29] Id.
[30] Drug Enforcement Agency, Medicare's National Mail-Order Program for Diabetic Testing Supplies (April 2013), available at: http://www.dea.ri.gov/hottopics/Medicare%20news/CMS-National%20Mail%20Order%20Program.pdf.  See also http://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Downloads/DMEPOSBeneFactSheetNatMailOrderProgApril201311634.pdf
[31]Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program, Referral Agents (March 2013) available at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/dme_ref_agt_factsheet_icn900927.pdf
[32] Id.
[33] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013), available at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[34] Id.
[35] Drug Enforcement Agency, Medicare's National Mail-Order Program for Diabetic Testing Supplies (April 2013), available at: http://www.dea.ri.gov/hottopics/Medicare%20news/CMS-National%20Mail%20Order%20Program.pdf.
[36] 42 C.F.R. §414.408 (d)
[37] 42 C.F.R. §414.408 (e)(2)(b)(3)(ii)
[38] Center For Medicare & Medicaid Services, What You Should Know if You Need Medicare-covered Equipment or Supplies (March 2013), available at: http://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Downloads/DMEPOSBeneFactSheetMarch2013.pdf
[39] Medicare Helpful Contacts available at, http://www.medicare.gov/contacts/topic-search-criteria.aspx?AspxAutoDetectCookieSupport=1
[40] The National Resource SHIP Resource Center, available at: https://shiptalk.org/public/home.aspx?ReturnUrl=%2f
[41] Medicaid Enrollment by State, available at: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html
[42]National Conference of State Legislators, State Pharmaceutical Assistance Programs, available at: http://www.ncsl.org/issues-research/health/state-pharmaceutical-assistance-programs.aspx
[43] AARP Benefits QuickLINK, available at: https://www.benefitscheckup.org/cf/index.cfm?partner_id=22.
[44] Lions Club International, Diabetes Awareness and Action, available at:  http://www.lionsclubs.org/EN/member-center/planning-projects/diabetes/index.php
[45] Rotary International. available at: http://www.rotary.org/en/Pages/ridefault.aspx.
[46] Center for Medicare & Medicaid Services, Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program Medicare Learning Network (MLN) Fact Sheet, available at http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DMEPOS_Competitive_Bidding_Factsheets.pdf
[47] Center for Medicare Advocacy, The Medicare Part B: Durable Medical Equipment (DME) Benefit, available at http://www.medicareadvocacy.org/Projects/AdvocatesAlliance/IssueBriefs/10_08.09.DME.pdf
[48] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013), available at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[49] A glossary of Medicare terms is available at: http://www.medicare.gov/glossary/m.html.
[50] Department of Health and Human Services, Center for Medicare & Medicaid Services, Advance Beneficiary Notice of Non-coverage (ABN) Part A and Part B (May 2012), available at http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/abn_booklet_icn006266.pdf
[51] See the discussion of the mandatory and voluntary use of ABNs: http://www.medicareadvocacy.org/cms-clarifies-when-the-advance-beneficiary-notice-of-non-coverage-abn-must-be-issued/; see also Medicare Rights Center, What is an Advance Beneficiary Notice (ABN)?, available at http://www.medicareinteractive.org/page2.php?topic=counselor&page=script&slide_id=191.
[52] The Official U.S. Government Site for Medicare, Keeping costs down with assignment, available at http://www.medicare.gov/your-medicare-costs/part-a-costs/assignment/costs-and-assignment.html
[53] National Mail-Order Competition for Diabetic Supplies, available at http://www.dmecompetitivebid.com/Palmetto/Cbic.nsf/files/R2_Fact_Sheet_Mail-Order_Diabetic_Supplies.pdf/$FIle/R2_Fact_Sheet_Mail-Order_Diabetic_Supplies.pdf
[54] Medicare's Coverage of Diabetes Supplies & Services, available at http://www.medicare.gov/pubs/pdf/11022.pdf
[55] Medicare Learning Network, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), available at http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/DMEPOSCompBidProg.pdf
[56] See, http://www.medicareadvocacy.org/Projects/AdvocatesAlliance/IssueBriefs/10_08.09.DME.pdf for more information regarding Medicare Part B's Durable Medical Equipment (DME) Benefit.
[57] DMEPOS Fee Schedules, available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/downloads/dme10_c_summary.pdf
[58] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013) available at, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.
[59] State Medicaid agencies generally cover co-payments and deductibles for their citizens who are dually eligible for Medicare and Medicaid or eligible for assistance through a Medicare Savings Program(MSP).
[60] Center for Medicare & Medicaid Services, The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bid Program (March 2013) available at, http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Mail_Order_Factsheet_ICN900924.pdf.

 

 

 

 

 

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