National Competitive Bidding Overview

National Competitive Bidding Overview

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Simply contact our qualified National Competitive Bidding Experts toll-free at 1.800.642.6065 or contact us online.

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In April of 2007, CMS 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”).

To kick-start the program, suppliers in 10 selected CBAs submitted bids for contracts during the summer of 2007 (Round 1).  Bidding entities were overwhelmed by flaws in the bid submission process, financial documentation review process and bid review process.   Ultimately, after reviewing approximately 6,500 bids, CMS offered contracts to 329 suppliers during spring of 2008.

Contract suppliers in those 10 initial bidding areas saw average reimbursement cuts of 26 percent on the product categories covered under the program.  Contracts initially went into effect on July 1, 2008.  The July 15, 2008 implementation of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) terminated these contracts and immediately reinstated all suppliers of DMEPOS for all products in the competitive bidding areas, delayed the implementation of the program, and required certain amendments to the program upon re-implementation.  As a “pay-for” for the delay in the program, suppliers in all areas of the country saw a Jan. 1, 2009 9.5 percent reduction in reimbursement for those products included in the first round of the program.

In the fall of 2009, suppliers in the nine remaining Round 1 bid areas again submitted bids to supply competitively bid items in those areas. In June 2010, CMS announced that the rebid results were such that suppliers would experience a 32 percent payment reduction on top of the 9.5 percent they had already paid for the delay. Finally, in November 2010, CMS announced that they had awarded 1,217 contracts to 356 companies nationwide. Those contracts are effective as of January 1, 2011.

Competitive bidding is a sealed-auction bid program 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 took place in 9 CBAs in Round 1.  In 2011, the program expanded to 91 additional CBAs areas, including 70 that were announced on June 1, 2008, in Round 2 and an additional 21 areas per the health care reform legislation.

Contracted 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.

CMS is required by law to recompete contracts under this DMEPOS Competitive Bidding Program at least once every three years. The Round 1 Rebid contract period for product categories, except mail-order diabetic supplies, expires on December 31, 2013. CMS is now conducting the Round 1 “Recompete” competition for six product categories in the same competitive bidding areas as the Round 1 Rebid.

The Round 1 Recompete product categories are:

  • Respiratory Equipment and Related Supplies and Accessories
    • includes oxygen, oxygen equipment, and supplies; continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories; and standard nebulizers
  • Standard Mobility Equipment and Related Accessories
    • includes walkers, standard power and manual wheelchairs, scooters, and related accessories
  • General Home Equipment and Related Supplies and Accessories
    • includes hospital beds and related accessories, group 1 and 2 support surfaces, transcutaneous electrical nerve stimulation (TENS) devices, commode chairs, patient lifts, and seat lifts
  • Enteral Nutrients, Equipment and Supplies
  • Negative Pressure Wound Therapy Pumps and Related Supplies and Accessories
  • External Infusion Pumps and Supplies

CMS is conducting the Round 1 Recompete in the same competitive bidding areas (CBAs) as the Round 1 Rebid.

A list of the specific items in each product category is available on the Competitive Bidding Implementation Contractor (CBIC) website at http://www.dmecompetitivebid.com/.

The specific ZIP codes in each Round 1 Recompete CBA are also available on the CBIC website.

Round Two and Recompete Timeline

National Competitive Bidding Timeline
Date Milestone
8/16/2012 CMS announced bidding timeline, begins bidder education program
8/20/2012 Registration for user IDs and passwords began
9/7/2012 Authorized Officials are strongly encouraged to register no later than this date
9/28/2012 Backup Authorized Officials are strongly encouraged to register no later than this date
Fall 2012 Round 2 Bid evaluation ends
Announcement of single payment amounts
Begin contracting process
10/15/2012* CMS opens 60-day bid window for Round 1 Recompete
10/19/2012 Registration closes
11/14/2012* Covered document review date for bidders to submit financial documents
12/14/2012* 60-day bid window closes
Spring 2013 Round 2 Contract suppliers announced
Begin contract supplier education
Start beneficiary, referral agent and general supplier education program
*CMS announces single payment amounts, begins contracting process
Summer 2013 Implementation of Round 2 and national mail order program contract and prices
Fall 2013* CMS announces Round 1 Recompete contract suppliers, begins contract supplier education campaign.
CMS begins supplier, referral agent, and beneficiary education campaign
1/1/2014* Implementation of Round 1 Recompete contracts and prices

* Dates listed are target dates. Actual dates will be announced through listserv notice. Keep informed – click here to sign up to receive important updates regarding the DMEPOS Competitive Bidding Program.

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