DME Competitive Bidding Program Goes Live January 1st
On Wednesday, November 3rd, the Centers for Medicare & Medicaid Services
(CMS) finally released the list of the 356 suppliers that have contracts
with Medicare to provide certain medical equipment and supplies to
beneficiaries in nine communities (Metropolitan Statistical Areas or “MSAs”)
across the U.S. at competitively bid rates. CMS’ Durable Medical Equipment
competitive bidding program aims to save Medicare and its beneficiaries
nearly $28 billion over 10 years, a whopping number. CMS achieves these
savings through steep cuts in reimbursement rates averaging 32 percent on
the DME items selected under the program.
The competitive bidding program goes into effect on January 1, 2011, for
beneficiaries in the Charlotte, Cincinnati, Cleveland, Dallas, Kansas City,
Miami, Orlando, Pittsburgh and Riverside areas. To decide the competitively
bid rate, CMS accepted supplier bids from the nine regions on certain items
of durable medical equipment and supplies. The new, lower rates also mean
that beneficiaries will pay less than they currently pay less in copayments
(approximately $10 billion less over ten years).
Although orthotics and prosthetics are essentially exempted from the current
competitive bidding program, the fee cuts are indicative of an economic
client under which providers and suppliers in the DME area will undergo
tremendous turmoil in the coming years. And this environment could have a
spill-over effect on O&P care. The extent to which this may occur is not
currently known. In addition, CMS may accept bids for “off the shelf”
orthotics in a future round of bidding; the results of this first round will
illustrate what can be expected if and when competitive bidding is applied
to off-the-shelf orthotics.
DME impacted by the first round of competitive bidding includes:
… Oxygen Supplies and Equipment
… Standard Power Wheelchairs, Scooters, and Related Accessories
… Complex Rehabilitative Power Wheelchairs and Related Accessories (Group 2)
… Mail-Order Replacement 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
Based on bids submitted by these suppliers, beneficiaries and Medicare will
see prices, on average, 32 percent lower than Medicare currently pays for
the same items. To alleviate potential disruptions in access, CMS plans to
launch a comprehensive public education effort to include mailings to
beneficiaries, a full range of Internet-based and printed program
information, and educational teleconferences. In addition, CMS asserts the
1-800-MEDICARE customer service representatives and case workers will be
ready to assist beneficiaries. It should be noted that CMS’ announcement of
the winning suppliers was issued later than expected, leaving little time
for beneficiaries to make arrangements with new suppliers if their existing
supplier did not win a contract from CMS and are not grandfathered into the
program.
Beneficiaries can expect to receive notices from their current DME suppliers
alerting them to whether they will continue to supply devices under the new
program. There are also provisions for grandfathering certain providers who
are currently providing ongoing DME to beneficiaries. In addition, once the
new program is implemented, if beneficiaries are prescribed a device that is
not supplied by their new Medicare contractor, that supplier must make a
good faith effort to find another competitively bid contractor that can
supply that device or work with the prescribing medical professional to find
a substitute.
A “Competitive Acquisition Ombudsman” will be available at CMS to respond to
complaints and inquiries from suppliers and beneficiaries about the
application of the program and issue an annual Report to Congress. A list of
Medicare contract suppliers in the nine initial areas is posted at
www.medicare.gov (under “Resource Locator” select “Medical Equipment and
Supplies”). Beneficiaries can also call 1-800-MEDICARE (TTY users should
call 1-877-486-2048) to find a local supplier. Also, local offices of
various partner groups, such as State Health Insurance and Assistance
Program, Area Office on Aging, can provide information on the program and
can help find Medicare contract suppliers.
CMS has set up a web site for the Medicare DMEPOS Competitive Bidding
Program: http://www.cms.hhs.gov/DMEPOSCompetitiveBid/
The Competitive Bidding Implementation Contractor web site:
http://dmecompetitivebid.com/palmetto/cbic.nsf/DocsCat/Home
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