Durable medical equipment prosthetics, orthotics and supplies firms granted a temporary reprieve last summer by Congress from participating in a Medicare competitive bidding program will have to participate again in 2009.

CMS issued an interim final rule Jan. 15 to move the delayed program forward.

While the agency has yet to announce the deadline for DMEPOS firms to rebid, it has designated the cities - or metropolitan statistical areas - for the first round, and outlined the included product categories. It also has made changes to the bidding program required by the Medicare Improvements for Patients and Providers Act of 2008.

The DMEPOS competitive bidding program was authorized by Congress in 2003 to replace the current fee schedule-based Medicare payment system for certain products, including oxygen equipment, wheelchairs and sleep apnea therapies.

CMS finalized rules for the program in 2007 and in March 2008 released payment levels scheduled to take effect July 1, 2008, based on the supplier bids for the 10 product categories in 10 metro regions participating in round one. CMS highlighted expected savings of 26% in costs for beneficiary supplies, compared to the fee schedule costs.

But in response to vigorous protest from the suppliers, MIPPA delayed implementation of the program for 18 months, enacting temporary fee schedule cuts to make up the cost savings ("¹ Also see "Medicare Bill Becomes Law: Industry Focuses On What Didn’t Make the Cut" - Medtech Insight, 21 July, 2008., p. 5).

Supplier Complaints Addressed In Interim Reg

DMEPOS suppliers and manufacturers charged that the program as initially pursued was unfairly executed and put too much emphasis on costs.

At a House Ways and Means Health Subcommittee hearing in May 2008, suppliers and manufacturers said that the competitive bidding program would limit patient care by rewarding cheaper products, without sufficiently factoring in product performance ("² Also see "House Panel Weighs Alternatives To DMEPOS Competitive Bidding Program" - Medtech Insight, 12 May, 2008., p. 17).

One complaint was that 60% (630 of 1,005) of first-round bidders in 2008 were rejected for lack of proper documentation in their applications. Another was that while winning bidders would have to be accredited, their subcontractors would not.

Many of these complaints were addressed by MIPPA. The interim final rule, as required by the law, sets up a "covered document" review process for providing feedback to suppliers regarding missing financial documents.

The regulation also requires DMEPOS suppliers awarded a contract under the program to disclose to CMS information about associated subcontracters, including whether accreditation standards are met. In conjunction with the rule, CMS named a new panel of members for the Program Advisory and Oversight Committee, comprised of physicians and industry representatives, to oversee the program.

Same Metro Areas Included Minus Puerto Rico

The MSAs for the round one rebidding: Cincinnati-Middletown (Ohio, Kent. and Ind.); Cleveland-Elyria-Mentor (Ohio); Charlotte-Gastonia-Concord (N.C. and S.C.); Dallas-Ft.Worth-Arlington (Texas); Kansas City (Mo. and Kansas); Miami-Ft. Lauderdale-Miami Beach (Fla.); Orlando (Fla.); Pittsburgh (Pa.); and Riverside-San Bernadino-Ontario (Calif.). Puerto Rico, which was included in round one of the original program, has been excluded ("³ Also see "Final Regulation Establishes Competitive Bidding For Durable Equipment" - Medtech Insight, 9 April, 2007., p. 3).

The competitive bid retry will call for bids on: oxygen supplies and equipment; standard power wheelchairs, scooters, and related accessories; certain complex rehabilitative power wheelchairs and related accessories; mail-order diabetic supplies; enteral nutrients, equipment and supplies; continuous positive airway pressure devices and related products and supplies; hospital beds and related accessories; walkers and accessories; and, in Miami, certain support surfaces.

These categories are all the same as in the 2007-2008 round one bidding, except that negative pressure wound therapy and group 3 complex rehabilitative power wheelchairs are now excluded.

MIPPA also delayed round two of the competitive bidding - initially slated to start in 2009 - until 2011.

- Sue Darcey (s.darcey@elsevier.com)

Rule Calls For Durable Medical Equipment Competitive Rebids In 2009

More from Archive

More from Medtech Insight