MEDICARE DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES (DMEPOS) COMPETITIVE BIDDING PROGRAM ROUND 1 REBID - What You Need to Know!

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MEDICARE DURABLE MEDICAL EQUIPMENT, PROSTHETICS,
ORTHOTICS, AND SUPPLIES (DMEPOS) COMPETITIVE
BIDDING PROGRAM ROUND 1 REBID - What You Need
to Know!

• Webinar Presentation July 2009

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What is DMEPOS? What is DMEPOS?

• DMEPOS stands for
• Durable Medical Equipment
• Prosthetics
• Orthotics
• Supplies
• Equipment and supplies covered under Medicare
  Part B

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DMEPOS Facts

• Medicare pays for durable medical equipment (DME)
  used in the home.
• Some examples of DME include oxygen equipment,
  walkers, wheelchairs, devices used to treat sleep
  disorders, and hospital beds.
• Over 9 million beneficiaries use DME each year.
• Total allowed charges for DMEPOS in 2008 were
  14.6 billion.
• DMEPOS represents approximately 6 percent of Part
  B expenditures.

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Current DMEPOS Payment Methodology

• As required by the Medicare law, Medicare has
  paid for most DME on a fee schedule basis since
  January 1, 1989.
• Any qualified, enrolled supplier can furnish
  DMEPOS.
• Medicare pays 80 percent of the lesser of the
  actual charge for the item or the fee schedule
  amount for the item the beneficiary pays the
  remaining 20.

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What is Competitive Bidding?

• Competitive Bidding is a way to help Medicare pay
  appropriately for DMEPOS.
• DMEPOS suppliers submit bids for selected DMEPOS
  products in selected areas Medicares payments
  will be based on bids.
• Qualified suppliers that submit competitive bids
  are offered Medicare contracts.

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What is Competitive Bidding?

• When the program goes into effect, beneficiaries
  who live in or visit competitive bidding areas
  will need to use Medicare contract suppliers in
  most situations to buy or rent competitively bid
  DMEPOS equipment or supplies for Medicare to pay.
• Under the new program, Medicares DMEPOS payment
  rates will be less, so a beneficiarys 20
  coinsurance payments will be less too.

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What Are the Benefits?

• Beneficiary and taxpayer costs are reduced as a
  result of overall competitive bidding program
  savings.
• Competitive bidding creates incentives for DMEPOS
  suppliers to provide high quality products and
  services to Medicare beneficiaries efficiently at
  a reasonable cost.

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What Are the Benefits?

• Competitive bidding ensures a sufficient number
  of DMEPOS suppliers is available to meet the
  expected demand for a product in each competitive
  bidding area.
• Competitive bidding requires DMEPOS suppliers to
  meet certain quality and financial standards that
  reduce fraud in the Medicare program while
  establishing fair, market-based prices.

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History of Competitive Bidding

• The new program builds on successful
  demonstrations.
• The Medicare Prescription Drug, Improvement, and
  Modernization Act of 2003 mandated the
  development and implementation of the program.
• The program was in place briefly in 2008.
• On July 15, 2008, the Medicare Improvements for
  Patients and Providers Act of 2008 (MIPPA),
  delayed the program and made limited changes.

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Competitive Bidding - MIPPA Changes
MIPPA Changes Results
Delayed program and requires Round 1 Rebid competition in 2009 in nearly all of the same areas for most of the same items that were included in 2008. Later Rounds of the program also delayed. Allows time to make additional refinements to the competitive bidding program.
Establishes a process to give suppliers feedback on missing financial documents required to be submitted with bids. Suppliers that submit documents timely will have the opportunity to submit missing financial documents.
Requires contract suppliers to notify Medicare of subcontracting relationships and that each subcontractor meets supplier accreditation requirements. Helps Medicare ensure that quality products and services are being provided.
Provides limited exemption to the competitive bidding program for hospitals. Hospitals that only furnish walkers during inpatient stay or upon discharge dont have to bid.
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Who will be Affected?

• The program will affect beneficiaries who have
  Original Medicare and who
• Permanently live in a competitive bidding area or
• Obtain competitively bid items while visiting a
  competitive bidding area.
• Medicare Advantage enrollees can use suppliers
  designated by their plan.

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Where are the Round 1 Rebid Areas?

• Cincinnati Middletown (Ohio, Kentucky and
  Indiana)
• Cleveland Elyria Mentor (Ohio)
• Charlotte Gastonia Concord (North Carolina
  and South Carolina)
• Dallas Fort Worth Arlington (Texas)
• Kansas City (Missouri and Kansas)
• Miami Fort Lauderdale Miami Beach (Florida)

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Where are the Round 1 Rebid Areas?

• Orlando (Florida)
• Pittsburgh (Pennsylvania)
• Riverside San Bernardino Ontario (California)

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What are the Round 1 Rebid Products?

• Oxygen and Oxygen equipment
• Standard Power Wheelchairs, Scooters, and Related
  Accessories
• Complex Rehabilitative Power Wheelchairs and
  Related Accessories (Group 2)
• Mail-Order Diabetic Supplies
• Enteral Nutrients, Equipment and Supplies

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What are the Round 1 Rebid Products?

• Continuous Positive Pressure Airway Devices and
  Respiratory Assist Devices and Related
  Accessories
• Hospital Beds and Related Accessories
• Walkers and Related Accessories
• Support surfaces (e.g., powered mattresses) in
  Miami only

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What is Grandfathering?

• Beneficiaries who are currently renting DMEPOS
  products from noncontract suppliers may choose to
  continue to rent from the same supplier until
  their rental agreement expires if that supplier
  decides to become a grandfathered supplier.
• Suppliers will provide advance notification to
  the beneficiary to tell them they have not been
  awarded a contract and whether they will continue
  furnishing the items as a grandfathered supplier
  or will no longer furnish the item.

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What is Grandfathering?

• Contract suppliers and noncontract suppliers will
  work together to ensure a smooth transition.

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Beneficiary ProtectionsBeneficiary
Protections

• Competitive bidding ensures a sufficient number
  of qualified DMEPOS suppliers is available to
  meet the expected demand for a product in each
  competitive bidding area. Additional contract
  suppliers can be added at any time if necessary.
• Contract suppliers must furnish the item to any
  beneficiary in the area that comes to them
  regardless of where they live, and the supplier
  must accept the Medicare payment as payment in
  full (mandatory assignment).

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Beneficiary ProtectionsBeneficiary
Protections

• A physician authorization process ensures that
  the beneficiary will receive a particular brand
  product or mode of delivery if their physician
  determines that it is needed to avoid an adverse
  medical outcome.
• Contract suppliers must furnish the same range of
  products to Medicare beneficiaries that they
  furnish to other customers and must report on the
  products they furnish on a quarterly basis.

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When will Competitive Bidding Affect People with
Medicare?

• Medicare will begin the supplier bidding process
  soon, but there will be no immediate impact on
  Medicare beneficiaries.
• People with Medicare can continue to get their
  Medicare-covered equipment and supplies from any
  Medicare-approved supplier until the program
  begins again in 2011.
• Medicare is planning an intense beneficiary and
  referral agent education campaign in 2010.

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Questions?

• 1-800-MEDICARE (1-800-633-4227), TTY users should
  call 1-877-486-2048
• www.medicare.gov
• www.cms.hhs.gov/DMEPOSCompetitiveBid