Medicare Expands Competitive Bidding Program for Durable Medical Equipment

The 2003 law that created the Medicare Part D program also changed the way Medicare pays for certain durable medical equipment, prosthetics, orthotics, and supplies. The payment program did not affect every part of the country or every Medicare beneficiary, however.

Effective July 1, 2013, Medicare beneficiaries in Tennessee as well as other parts of the country will see a change in how they obtain DMEPOS.

The Competitive Bidding Program
The Medicare Modernization Act of 2003 (MMA) established requirements for a new Competitive Bidding Program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). Under the program, DMEPOS suppliers compete to become Medicare contract suppliers by submitting bids to furnish certain items in competitive bidding areas, and the U.S. Centers for Medicare & Medicaid Services (CMS) awards contracts to enough suppliers to meet beneficiary demand for the bid items.

The new, lower payment amounts resulting from the competition replace the Medicare DMEPOS fee schedule amounts for the bid items in these areas. All contract suppliers must comply with Medicare enrollment rules, be licensed and accredited, and meet financial standards. The program sets what CMS calls more appropriate payment amounts for DMEPOS items while ensuring continued access to quality items and services.

DMEPOS items include wheelchairs, walkers, oxygen and oxygen equipment, hospital beds, and support surfaces (mattresses and the like).

According to Medicare, the Competitive Bidding Program will result in reduced beneficiary out-of-pocket expenses and savings to taxpayers and the Medicare program. That's because Medicare beneficiaries owe a 20 percent coinsurance payment for DMEPOS. If Medicare pays less, the copayment will be less.

The original competitive bidding program was limited to certain zip codes in 11 states, among them California, Texas, Florida, and Pennsylvania.

The program has been expanded to other states, including certain zip codes in the four major metropolitan areas in Tennessee. Medicare beneficiaries who live in or plan to visit an area that is part of the Competitive Bidding Program generally must use a Medicare contract supplier.

Beneficiaries who are in a Medicare Advantage Plan are not affected by the Competitive Bidding Program. It is applies only to beneficiaries in original Medicare.

What should Medicare beneficiaries in Tennessee who need DMEPOS do?
It is very likely that they reside in a zip code in which Competitive Bidding Program is now in place. To make sure, beneficiaries should visit and enter their zip code.

For Medicare beneficiaries who are already receiving DMEPOS, they should check with their supplier to see whether their current supplier is under contract with CMS. If not, a supplier can seek to become "grandfathered." This "grandfathering" includes suppliers who repair equipment that is already owned by the Medicare beneficiary.

If the Medicare beneficiary elects to continue using a non-contract supplier that isn't grandfathered, the supplier must give the beneficiary an Advance Beneficiary Notice that explains that Medicare won't pay for the DMEPOS.

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