National Competitive Bidding Overview

National Competitive Bidding Overview

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CMS has formally launched the Medicare DMEPOS competitive bidding program through publication of its “Final Rule”. Under the Final Rule, HME providers (“suppliers”) were required to be successful bidders and meet certain program standards in order to supply selected DMEPOS items to Medicare beneficiaries in selected competitive bidding areas (“CBAs”).  This program was to begin July 1, 2008.  However, the program has been delayed as a result of HR 6331. Winning suppliers will be reimbursed based on the median of the winning suppliers’ bids for each of the selected items in the CBA (rather than the Medicare fee schedule or supplier bid amount). HME providers that do not bid, or are not successful bidders, will not be able to bill Medicare for new competitively-bid items once the program begins in their CBA.

Competitive bidding also is being phased in by DMEPOS product category. Suppliers can bid on one or more product categories, but must bid on all specified codes within the category. Competitive bidding is being phased in geographically, and will take place in ten metropolitan statistical areas (“MSAs”) in the first round. The program will be expanded to 70 additional MSAs areas in the second round.

Suppliers must be accredited as meeting supplier quality standards before the contract can be awarded. Accreditation must at least be pending before a bid can be submitted. The Final Rule also implements a number of provisions to ensure small supplier participation and access to the competitive bidding market. CMS will set a target number for small supplier participation equaling 30 percent of the number of winning suppliers. If necessary, CMS may offer contracts to small suppliers that submitted bids higher than but close to the winning bids in order to reach that goal. CMS also will allow small suppliers to form networks if they cannot service the entire CBA independently.

Bidding Timeline
The DMEPOS Competitive Bidding Program has been delayed as a result of HR 6331.  The 18-month delay will result in a new bidding timeline when the delay is over, and the rebidding process begins.  Updates to the bidding timeline will be posted as soon as they become available.

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