Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS)
Competitive Bidding
The Medicare Modernization Act mandated that CMS implement a competitive bidding process for DMEPOS to achieve four objectives:
- To assure beneficiaries access to quality DMEPOS
- To reduce the amount Medicare pays for DMEPOS
- To reduce the coinsurance beneficiaries pay for DMEPOS
- To contract with suppliers who meet quality and financial standards and are accredited
Who is affected?
This program begins July 1, 2008 in ten Metropolitan Statistical Areas (MSAs) across the country (Round 1) and is scheduled to roll out across the country at intervals thereafter. The ten areas from Round 1 include Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh, Riverside, and San Juan. Beneficiaries residing in these ten areas will receive a letter from Medicare about the program, a brochure about DMEPOS items, and a list of contracted suppliers in the area. SHIPs should note that anyone getting DMEPOS items from within one of these areas (including those visiting the area) must follow the DMEPOS rules for coverage. CMS has created a fact sheet (also available in Spanish) that answers common questions for beneficiaries about the DMEPOS competitive bidding program. Round 2 begins in 2009 and will include 70 areas.
What DMEPOS items are covered?
Competitive bidding for Round 1 includes ten of the top DMEPOS product categories and certain products within these ten categories. Similarly, Round 2 competitive bidding will include eight DMEPOS product categories; however the specific items affected by competitive bidding in Round 2 have not been announced.
Where can beneficiaries get these DMEPOS items?
CMS approved 325 suppliers for the ten Round 1 DMEPOS competitive bidding communities. In order to receive a contract, these suppliers were required to meet financial and quality standards as well as be accredited by one of CMS' approved accrediting organizations. As before, health care providers write prescriptions for medically necessary DMEPOS items for beneficiaries. Beginning July 1, 2008 in these areas, for Medicare to provide coverage for these DMEPOS items, beneficiaries generally must obtain the items from a contract supplier. However, in some cases non-contract providers may become grandfathered suppliers to provide coverage for certain items. For other non-contract suppliers, Medicare will no longer provide payment for any of the items under competitive bidding. Non-contract suppliers which provide these items to beneficiaries should have beneficiaries sign an Advance Beneficiary Notice (ABN) (zipped) in order to acknowledge they are responsible for the full cost of the items. Beneficiaries who have not signed an ABN and receive items from a non-contract supplier will not be responsible for the cost of the item.
How much will DMEPOS items cost?
CMS states that the amounts that Medicare will pay for the ten product categories included in Round 1 average 26% less than Medicare's previous payment amounts. Savings for beneficiaries' out-of-pocket costs range from 14% to 43%. Specific costs for items in each area in Round 1 are now available.
More information is available from the DMEPOS Competitive Bidding resource on the CMS website.
