On April 9, 2013, the Centers for Medicare & Medicaid Services (“CMS”) announced the contract winners for Round 2 of the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (“DMEPOS”) Competitive Bidding Program. This article is intended to answer some frequently asked questions about the Round 2 Competitive Bidding Program and the effect on referral agents.
Who Won the Round 2 Contracts?
As of April 9, 2013, there are 799 suppliers that have been awarded contracts in this round, and these contracts will affect suppliers and beneficiaries in 91 Competitive Bidding Areas (“CBAs”). Additionally, CMS announced 18 suppliers that accepted contracts to provide mail-order diabetic testing supplies nationwide at competitively bid prices.
A list of contract supplier names is available at www.dmecompetitivebid.com. Contract supplier locations for each product category in each CBA can be found in the Supplier Directory at www.medicare.gov/supplier.
When Are the Round 2 Contracts Effective?
Round 2 of the Competitive Bidding Program and the National Mail-Order Program will go into effect July 1, 2013.
Who Are Referral Agents?
For these purposes, “referral agents” include entities such as Medicare-enrolled physicians, treating practitioners, hospitals (e.g., discharge planners, social workers, etc.) and pharmacists who refer beneficiaries for services in a CBA.
What Does This Announcement Mean for Referral Agents?
Referral agents play an important role when it comes to assisting beneficiaries in finding a contracted supplier when either the beneficiary lives in or travels to a CBA. Effective July 1, 2013, the referral agent has a responsibility to assist a beneficiary who lives in or travels to a Round 2 CBA with determining if the DMEPOS item(s) a beneficiary needs is included in any of the bid product categories. If the DMEPOS item(s) falls into one of the competitive bid product categories, the referral agent should inform the beneficiary and help with obtaining the item from a contract supplier, unless an exception applies.
What Are the Exceptions?
There are two main exceptions. The first exception relates to hospitals and the second to physicians.
Hospital Exception
Under the first exception, Medicare hospitals may furnish competitively bid walkers or folding manual chairs to their patients without being awarded a Round 2 contract. The hospital will be reimbursed at the Round 2 rate for those items. Medicare hospitals that have also enrolled as Medicare DMEPOS suppliers may be eligible for an exception to the Round 2 contracting process, as long as the following requirements are met:
- The walker or manual folding wheelchair must be furnished by the hospital to its own patients during an admission or on the date of discharge; and
- The walker or manual folding wheelchair must be billed to a DME Medicare Administrative Contractor (“DME MAC”) using the DMEPOS billing number that is assigned to that hospital.
Note: This exception does not apply to hospital-owned or affiliated DMEPOS suppliers.
Physician Exception
Similar to the hospital exception above, the second exception permits beneficiaries to obtain a competitively bid walker or manual folding wheelchair from their physicians in limited circumstances. The physician will be paid out at the Round 2 rate for those items. Medicare physicians and treating practitioners who have also enrolled as Medicare DMEPOS suppliers may be eligible for an exception to the Round 2 contracting process. This exception includes physicians, podiatrists, nurse practitioners, physician assistants and clinical nurse specialists. Under this exception, a physician may furnish these items without being awarded a Round 2 contract, as long as the following requirements are met:
- The walker or folding manual wheelchair must be furnished by the physician or treating practitioner DMEPOS supplier to his or her patients as a part of his or her professional service; and
- The walker or folding manual wheelchair must be billed to a DME MAC using the DMEPOS billing number that is assigned to the physician, treating practitioner or group practice.
What Service Areas Are Affected by Round 2?
Each CBA is a metropolitan statistical area (“MSA”), which has been defined by the U.S. Office of Management and Budget. Each MSA contains a list of cities and/or counties. Medicare defines the CBA by listing zip codes from the MSA. Click here to view the CBAs for Round 2.
What Items Are Included in Round 2?
Round 2 of the DMEPOS Competitive Bidding Program includes the following categories of items and services:
- Oxygen supplies and equipment;
- Standard (power and manual) wheelchairs, scooters and related accessories;
- Enteral nutrients, equipment and supplies;
- CPAP devices, respiratory assist devices and related supplies and accessories;
- Hospital beds and related accessories;
- Walkers and related accessories;
- Support surfaces (Group 2 mattresses and overlays); and
- Negative pressure wound therapy pumps and related supplies and accessories.
Each product category is composed of multiple items that are identified by Healthcare Common Procedure Coding System codes. If a DMEPOS supplier is awarded the contract for a product category, it must provide all items and services in that product category.
What Are the Payment Amounts for Round 2 Items?
Based on bids submitted by these suppliers, beneficiaries and Medicare will see prices, on average, 45% lower than Medicare currently pays for the same items included in the Round 2 CBAs and 72% lower on mail-order diabetic testing supplies nationwide. The new single payment amounts for items included in the Round 2 and national mail-order competitions of the DMEPOS Competitive Bidding Program are available here.
If you have questions or concerns regarding the foregoing or would like additional information, please contact Kendra L. Conover at 317-977-1456 or kconover@hallrender.com, Todd J. Selby at 317-977-1440 or tselby@hallrender.com or your regular Hall Render attorney.
