PAOC Meeting on DMEPOS Competitive Bidding Postponed to March 17

CMS has announced that the Program Advisory and Oversight Committee (PAOC) meeting that had been scheduled for February 23, 2010 has been postponed until March 17, 2010 due to logistical issues arising from the recent winter storms in the Baltimore area.   Background on the meeting, including a link to the agenda, is available at our previous postingRegistration for the meeting is now open. 

DMEPOS Bidding PAOC Meeting Agenda, Educational Materials Posted

CMS has released the agenda for its February 23, 2010 Program Advisory and Oversight Committee (PAOC) meeting.  Topics to be covered include:  a bidding status update; review of the DBIdS system performance; an accreditation update; supplier and beneficiary educational plans; contract supplier oversight and monitoring; a tentative timeline for Round 2; and a discussion of the subdivision of the NYC, Los Angeles, and Chicago metropolitan statistical areas for bidding purposes.   The agency expects to begin registration for the meeting early next week.  CMS also posted its first DMEPOS competitive bidding "program preview" document at the "DMEPOS Toolkit" web page.  The document reviews the program basics, highlights the "proven results" of the DMEPOS bidding demonstration program, and discusses the agency's implementation plans.  CMS also released a MLN Matters article covering the same materials. 

DMEPOS Competitive Bidding/PAOC Meeting (Feb. 23, 2010)

On February 23, 2010, CMS is hosting a Program Advisory and Oversight Committee (PAOC) meeting to discuss DMEPOS competitive bidding, including the Round 1 Rebid and upcoming rounds. CMS expects to begin registration for the meeting within the next few weeks.

Enteral Nutrient Prices During Non-Part A Nursing Stays

The OIG has issued a report entitled Medicare Part B Services During Non-Part A Nursing Home Stays: Enteral Nutrient Pricing.” The OIG found that Medicare's fee schedule amounts for nutrients provided during non-Part A stays in 2006 exceeded prices available to nursing home suppliers and other purchasers by more than 50%. Consequently, the OIG recommends that CMS adjust Medicare fee schedule amounts for enteral nutrients to more accurately reflect supplier prices. CMS agreed with this recommendation. The agency also cited the resumption of the competitive bidding program and consideration of adjustment of the Medicare fee schedule for enteral nutrients, once sufficient data is available from the bidding process, as opportunities to address enteral pricing concerns.

GAO Highlights Problems in First Round of DMEPOS Competitive Bidding

The Government Accountability Office (GAO) has issued a report entitled “Medicare: CMS Working to Address Problems from Round 1 of the Durable Medical Equipment Competitive Bidding Program.” In this report, the GAO notes that while the first round of the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program (CBP) in 2007-2008 could have resulted in substantial savings if it had not been halted by Congress, there were significant problems with the bidding process. For instance, GAO noted that CMS repeatedly clarified its policies during the bidding window, and the information CMS provided to suppliers about bidding requirements was sometimes unclear and inconsistent, particularly regarding financial documentation. CMS also did not effectively notify suppliers that losing bids could be reviewed, so some suppliers missed this opportunity to address bids that had been incorrectly disqualified. The GAO also found several problems with the electronic bid submission system, including data losses from automated logouts and unscheduled downtimes, which made it difficult for some suppliers to submit bids. CMS has taken steps to improve the bidding process for the current round 1 rebid, according to the GAO, including certain safeguards that were mandated by Congress and a new electronic bidding submission system. The GAO’s only recommendation is that if CMS decides to conduct reviews of disqualified bids, it should notify all suppliers of this process; CMS agreed.

Final CY 2010 Medicare Physician Fee Schedule Rule Released

The Centers for Medicare & Medicaid Services (CMS) has released its final rule updating the Medicare physician fee schedule (MPFS) for calendar year (CY) 2010. Most notably, the final rule calls for a 21.2% across-the-board cut in MPFS paymentsfor 2010 due to the statutory sustainable growth rate (SGR) formula (CMS had forecast a 21.5% cut in the proposed rule). For 2010, the SGR formula results in a conversion factor of $28.4061, compared to the 2009 conversion factor of $36.0666. [NOTE:  CMS subsequently published a notice correcting the conversion factor; the new conversion factor is $28.3895].   As noted above, Congressional leaders are seeking a legislative solution to block the pending cut, but the outcome of these reform efforts are not certain at this time. CMS did exercise its administrative authority to remove drugs from the definition of “physicians’ services” for purposes of the SGR formula, which CMS expects will reduce the number of future years in which physicians are projected to experience a negative update under the SGR formula, but which does not impact 2010 rates. The sweeping rule affects a wide range of other Medicare policies, as discussed after the jump.

  • CMS is cutting technical component payments for certain non-hospital imaging procedures by changing the imaging equipment usage assumption for equipment priced over $1 million from the current 50% usage rate to a 90% usage rate, which will reduce per procedure practice expense (PE) relative value units (RVUs) -- and thus the per procedure technical component reimbursement -- for services using such imaging equipment).   In the final rule, CMS decided only to apply this change to MRIs and CTs. The payment cut will be transitioned with full implementation not for four years. Beginning 2010, 75% of the practice expense is paid based on the old usage rate with full implementation in 2013. CMS also has adopted provisions to begin implementing the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) provision mandating an accreditation process for entities furnishing the technical component of certain advanced diagnostic testing procedures by January 1, 2012. CMS also is publishing a separate notice inviting independent accreditation organizations to participate in the accreditation program. 
  • The final rule revises the Electronic Prescribing Incentive Program and the Physician Quality Reporting Initiative (PQRI) to, among other things, simplify e-prescribing reporting requirements, provide additional reporting options (including an electronic health record-based reporting mechanism), allow group practices to be considered successful e-prescribers; and expand PQRI quality measures. 
  • CMS is adopting its proposal to refine malpractice RVUs to redirect payment to physicians with the highest malpractice costs.
  • CMS is ending payment for consultation codes and instead requiring use of evaluation and management (E/M) codes. Note that under the final rule, CMS is making an exception to this policy for telehealth consultations and maintaining payment for G-codes used to bill for these consultations. Savings from the discontinuation of consultation codes are being redistributed to increase payments for the existing E/M services and to the payment for the surgical global period.
  • The final rule clarifies the "stand in the shoes" standard for considering compensation arrangements under Stark.
  • CMS is establishing a process for submitting claims for damages caused by the MIPPA provision terminating contracts awarded in 2008 under the durable medical equipment, prosthetic, orthotic and supplies (DMEPOS) competitive bidding program, and making changes in the “grandfathering” rules for noncontract suppliers. CMS is also finalizing policy changes regarding maintenance and servicing of oxygen equipment. 
  • The rule provides that the annual per beneficiary outpatient therapy caps for CY 2010 will be $1860 each for (1) outpatient physical therapy and speech-language pathology services combined, and (2) outpatient occupational therapy services. CMS also notes that its authority to provide for exceptions to therapy caps will expire on December 31, 2009, unless the Congress acts to extend it.
  • The final rule implements a variety of other Part B policies, including provisions that: establish Medicare coverage of cardiac and pulmonary rehabilitation services and chronic kidney disease education; update end-stage renal disease (ESRD) facility rates; require authorized compendia used to determining medically-accepted indications of drugs and biologicals used off-label in anti-cancer chemotherapeutic regimens to have a transparent process to evaluate therapies and identify potential conflicts of interests; revise certain requirements under the Part B drug competitive acquisition program. 

The official version of the rule is scheduled to be published in the Federal Register on November 25, 2009. CMS will accept comments on certain provisions of the final rule until December 29, 2009. Specifically, CMS is accepting comments on the following issues: interim RVUs for selected codes, the physician self-referral designated health services, services for consideration for the Five-Year Review of work RVUs, and whether additional guidance is needed regarding CMS’s policy regarding services provided under arrangement.  

DMEPOS Competitive Bidding Window Open until December 21, 2009

CMS has officially opened the bidding window for the Round 1 Rebid of the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program, and bids are due by December 21, 2009.  By way of background, under competitive bidding, only suppliers who are successful bidders will be eligible to furnish certain categories of DMEPOS to Medicare beneficiaries in certain geographic areas (with very limited exceptions). Successful bidders will be paid based on the median of the winning suppliers’ bids for each of the selected items in the region, rather than the Medicare fee schedule or supplier bid amount. All suppliers interested in submitting bids must register with CMS’s contractor by November 4, 2009; suppliers that do not register cannot bid and are not eligible for contracts. The deadline for submitting hardcopy financial documents for the “covered document review” process, under which CMS will notify suppliers of any missing financial documents, is November 21, 2009 (note that CMS will not provide information to bidders on whether submitted documents are acceptable, accurate or meet applicable requirements).  For detailed instructions and guidance related to submitting bids, see the Competitive Bidding Implementation Contractor (CBIC) website; other background information regarding the DMEPOS competitive bidding program is available here.

DMEPOS Accreditation Delay for Pharmacies

On October 13, 2009, President Obama signed into law H.R. 3663, which delays from October 1, 2009, to January 1, 2010 the requirement for pharmacies that supply Medicare durable medical equipment to meet certain accreditation requirements. Note that the legislation does not affect the accreditation requirement for pharmacies to qualify to bid in a Medicare DME, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition area. The National Supplier Clearinghouse (NSC) has issued guidance on the application of the new pharmacy accreditation policy, clarifying that this extension pertains only to pharmacies supplying DME; entities registered with the NSC as DME suppliers with a pharmacist on staff do not qualify for the extension. Moreover, pharmacies that were not accredited prior to the October deadline are not subject to the revocation of Medicare billing privileges. Any pharmacy that wishes to withdraw a previously-submitted voluntary termination request must submit a letter to the NSC by October 23, 2009.  

DMEPOS Competitive Bidding Update

CMS recently announced that it is on track to open the 60-day bid window for the Medicare DMEPOS competitive bidding program on October 21, 2009. CMS expects to officially open the bid window through a listserv/e-mail message. In the meantime, CMS’s Competitive Bidding Implementation Contractor (CBIC) continues to post guidance documents, frequently-asked questions, bidding information charts, and other educational resources related to competitive bidding on its web site.

DMEPOS Bidding Financial Documentation Requirements - CMS Call on Sept. 22, 2009

On September 22, 2009, CMS is hosting another Medicare DMEPOS competitive bidding telephone conference.  This session will focus on the financial documentation that must be submitted for each type of business structure and how bidders should report their capacity to serve beneficiaries. In addition, CMS will address special provisions for small suppliers and networks. The call will take place from 2:00 pm – 3:00 pm ET. TO participate dial 1-800-837-1935 and reference Conference ID 23045166. More information on DMEPOS supplier educational events is available on the DMEPOS bidding Competitive Bidding Implementation Contractor (CBIC) website

CMS Call on DMEPOS Competitive Bidding - Rules for Bidding Successfully (Sept. 2, 2009)

On September 2, 2009, CMS is holding a Medicare DMEPOS Competitive Bidding Program Bidders’ Conference Call entitled “Learn the Rules to Submit a Bid Successfully.” CMS will provide an overview of the competitive bidding areas, product categories, rules for submitting bids. CMS also will address eligibility requirements such as supplier standards, subcontracting, licensure, bonding, and accreditation, and special rules for physicians and treating practitioners, skilled nursing facilities, and hospitals.
 

Schedule of Medicare DMEPOS Competitive Bidding Supplier Education Events

CMS has announced a series of events to help suppliers prepare for the upcoming Medicare DMEPOS competitive bidding program. Specifically, CMS and its DMEPOS competitive bidding contractor will host sessions on:  How to Register to Access the Bidding System (Aug. 19); Learn the Rules to Submit a Bid Successfully (Sept. 2); What You Need to Know Before Submitting Your Bid (Sept. 16); Financial Documentation Plus Small Supplier Considerations (Sept. 22); How a Bid is Evaluated (Sept.29); Bid Submission Process (Oct. 7); and Open Calls (Oct. 14 and Nov. 4).   Information on accessing the calls and registering for updates is available here

Medicare DMEPOS Bidding Education Calls, Materials

On August 19, 2009 from 2-3 ET, CMS is holding a Medicare DMEPOS Competitive Bidding Program Bidders' Conference focusing on "How to Register to Access the Bidding System." To participate, dial 1-800-837-1935 & reference conference ID: 23038688. In addition, the next Pharmaceutical, Pharmacy, and Device Manufacturers Open Door Forum is scheduled for August 26, 2009 from 3:30pm-4:30pm. It will focus on will focus on Accreditation and Surety Bond Implementation for DMEPOS suppliers. To participate, dial 1-800-837-1935 & reference conference ID: 23827900.  CMS also has issued a transmittal providing information for educational purposes regarding the DMEPOS competitive bidding round one re-bid geographic areas and product categories.  

CMS Announces Detailed DMEPOS Competitive Bidding Timeline

On August 3, 2009, CMS announced the detailed  timeline for the Medicare DMEPOS competitive bidding program Round One Rebid.   Key dates include the following:  registration for bidding opens August 17, 2009; the bid window opens October 21, 2009 and closes December 21, 2009; the "covered document review date" (deadline to submit financial documents) is November 21, 2009; CMS announces single payment amounts and begins the contracting process in June 2010; CMS announces contract suppliers in September 2010; and the new program begins January 1, 2011.  (Note that certain of these documents are target dates and are subject to change.)  A variety of background documents, including bidding forms and registration FAQs are available on the Competitive Bidding Implementation Contractor (CBIC) web site. 
 

Preparing for DMEPOS Competitive Bidding

CMS has released an educational article identifying steps suppliers should take in preparation for the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to ensure successful bidder registration.

CMS DMEPOS Bidding Program "Webinar" -- July 20, 2009

CMS is holding a "webinar" on the DMEPOS competitive bidding program on July 20, 2009.   The session is designed for DMEPOS referral agents (beneficiary advocacy groups and prescribers) on July 20.   Participants will have the opportunity to ask questions of CMS policy experts.  Preregistration is required.

** The presentation slides are available here.

CMS Proposes CY 2010 Medicare Physician Fee Schedule Rule

On July 1, 2009, the Centers for Medicare & Medicaid Services (CMS) released the advance text of its proposed rule with comment period updating the Medicare physician fee schedule (MPFS) for calendar year (CY) 2010. Most notably, the proposed rule calls for a 21.5% across-the-board reduction in physician fee schedule payments under the statutory sustainable growth rate (SGR) formula. Over the past several years, Congress has repeatedly stepped in to block cuts triggered by the SGR formula, and such efforts are underway as part of broader health reform legislation, although the level of relief, if any, that may be provided is uncertain at this time. In the proposed rule, CMS has exercised its regulatory authority to remove drugs from the definition of “physicians’ services” for purposes of the SGR formula. CMS notes that spending on physician-administered drugs has risen faster than all other MPFS services, contributing significantly to the large projected reductions in future MPFS updates under the SGR formula. While this would not mitigate the projected negative 21.5% update for 2010, it would reduce the number of years in which negative updates are expected. In other policy areas the rule would, among many other things:

  • Change the equipment usage assumption for imaging equipment priced over $1 million from the current 50% usage rate to a 90% (which would significantly reduce per procedure practice expense relative value units (RVUs) -- and thus the per procedure technical component reimbursement -- for services using such imaging equipment) and begin to implement the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) provision mandating an accreditation process for entities furnishing certain non-hospital advanced diagnostic testing procedures by January 1, 2012;
  • Expand the measures and measure groups that eligible physicians can report under the Physician Quality Reporting Initiative (PQRI), allow physicians to report data on PQRI measures through a qualified electronic health record product, and establish a new process for group practices to be considered successful electronic prescribers.
  • Refine malpractice RVUs to redirect payment to physicians with the highest malpractice costs;
  • End payments for consultation codes and instead require use of evaluation and management codes;
  • Amend the "stand in the shoes" standard for considering compensation arrangements under Stark;
  • Establish a process for submitting claims for damages caused by the MIPPA provision terminating contracts awarded in 2008 under the durable medical equipment, prosthetic, orthotic and supplies (DMEPOS) competitive bidding program, and make changes in the “grandfathering” rules for noncontract suppliers;
  • Implement MIPPA provisions that provide Medicare coverage of cardiac and pulmonary rehabilitation services and chronic kidney disease (CKD) education;
  • Revise Medicare end stage renal disease facility (ESRD) rates, including updating the drug add-on adjustment (using a refined methodology for projecting growth in drug expenditures), the wage index adjustment, and the ESRD wage index floor;.
  • Make changes to the Part B drug competitive acquisition program designed to better define certain aspects of the program and minimize the administrative burden for participating physicians and vendors; and
  • Require authorized compendia used in determining medically-accepted indications of drugs and biologicals used off-label in an anti-cancer chemotherapeutic regimen to have a transparent process for evaluating therapies and for identifying potential conflicts of interests.

The official version of the rule will be published in the Federal Register on July 13, 2009, and comments will be accepted until August 31, 2009. 

CMS Targets January 2011 Implementation Date for DMEPOS Competitive Bidding

While bidding under the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program will take place later this year, the program will not actually go into effect until January 1, 2011 under a tentative timeline just released by the Centers for Medicare & Medicaid Services (CMS). This tentative implementation schedule for the Round 1 rebid, made public at a June 4, 2009 meeting of the Program Advisory and Oversight Committee (PAOC), includes the following milestones:

Spring 2009

  • Pre-bidding supplier awareness campaign began
  • PAOC meeting

Summer 2009

  • CMS announces detailed bidding/education event schedule
  • Bidder education campaign begins
  • Bidder registration period to obtain user IDs and passwords begins

Fall 2009

  • Bidding begins
  • Covered document review process begins (bidders may submit bid packages to qualify for review of missing financial documents)

Winter 2009/Spring 2010

  • Bid evaluation
  • Announcement of single payment amounts
  • Contract process begin

Summer 2010

  • Contract suppliers announced
  • Contract supplier education campaign begins

Fall 2010

  • Beneficiary, referral agency, and general supplier education campaign

January 2011

  • Program implementation

Also at the PAOC meeting, CMS discussed improvements to the on-line bidding system in the wake of numerous technical problems encountered during the initial bidding period in 2007 (the original round of the program, which went into effect briefly last summer, subsequently was blocked by Congress). In addition, CMS and its contractors stressed the importance of preparing now for the bidding process, including: getting appropriate state licenses, updating Medicare enrollment files with the National Supplier Clearinghouse, and getting accredited and bonded. The session also covered financial documentation, education activities, new supplier issues, and bidding for mail-order diabetic testing supplies, among other things.  We have posted a copy of the slides from the June 4, 2009 PAOC meeting on our web site.  For Reed Smith news and analysis related to the DMEPOS competitive bidding program, click here.   

CMS Announces General Timeline for DMEPOS Competitive Bidding Program

Today CMS announced the general timeline for the next round of DMEPOS competitive bidding program

Spring 2009

  • CMS Begins a Pre-Bidding Supplier Awareness Campaign
  • Program Advisory And Oversight Committee (PAOC) Meeting on June 4, 2009

Summer 2009

  • CMS Announces the Bidding Schedule and the Schedule of Supplier Education Events
  • CMS Begins Bidder Education Campaign
  • Bidder Registration Period to Obtain User IDs and Passwords Begins

Fall 2009

  • Supplier Bid Window Opens

CMS notes that suppliers wishing to participate in the Round One Rebid of the Medicare DMEPOS competitive bidding program, including suppliers that were awarded contracts in the first Round One which occurred in 2007, will need to re-register and submit a new bid application for the Round One Rebid competition. As in the first Round One program, suppliers must meet all applicable eligibility, financial, quality, and accreditation standards in order to be awarded a contract.  Key steps suppliers need to take to get ready for DMEPOS competitive bidding registration and bid submission include getting appropriate state licenses, updating Medicare enrollment files with the National Supplier Clearinghouse (NSC) and getting accredited and bonded.

Reed Smith’s Life Sciences Health Industry Alert, “CMS Prepares to Re-Launch Medicare DMEPOS Competitive Bidding—Tips for Potential Bidders,” also highlights steps suppliers can take now to prepare for the coming bidding cycle based on the lessons learned during the first round of bidding.

CMS Releases Draft DMEPOS Competitive Bidding Forms

In another indication that CMS is gearing up to launch DMEPOS competitive bidding, CMS has submitted to the Office of Management and Budget (OMB) a request to modify the forms to be used with the Round 1 Rebid of the DMEPOS competitive bidding program.  CMS states that it will use a modified version of the Request For Bids instructions and accompanying forms so that suppliers will be better able to identify and understand the requirements to submit a bid in the competitive bidding program.  The draft bidding form, instructions, and supplementary appendices (including details on financial documentation requirements) have been posted, and OMB is accepting comments on the proposed forms until June 18, 2009. 

Reed Smith’s Life Sciences Health Industry Alert, “CMS Prepares to Re-Launch Medicare DMEPOS Competitive Bidding—Tips for Potential Bidders,” highlights steps suppliers can take now to prepare for the coming bidding cycle based on the lessons learned during the first round of bidding.
 

CMS Prepares to Re-Launch Medicare DMEPOS Competitive Bidding -- Tips for Potential Bidders

CMS is preparing to re-launch its controversial competitive bidding program for Medicare suppliers of certain types of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Under competitive bidding, only suppliers who are successful bidders will be eligible to furnish certain categories of DMEPOS to Medicare beneficiaries in certain geographic areas (with very limited exception). Under competitive bidding, successful bidders will be paid based on the median of the winning suppliers’ bids for each of the selected items in the region, rather than the Medicare fee schedule or supplier bid amount. This will be CMS’s second attempt to institute DMEPOS competitive bidding, after the first round of bidding was blocked by Congress last year because of widespread concerns about how the program was implemented. Reed Smith’s Life Sciences Health Industry Alert, “CMS Prepares to Re-Launch Medicare DMEPOS Competitive Bidding—Tips for Potential Bidders,” highlights seven steps suppliers can take now to prepare for the coming bidding period based on the lessons learned during the first round of bidding.

PAOC Meeting on DMEPOS Competitive Bidding Program -- June 4, 2009

 

CMS has announced that it is convening a meeting of the DMEPOS Program Advisory and Oversight Committee (PAOC) on June 4, 2009 to discuss the Round 1 Rebid of the Medicare DMEPOS Competitive Bidding Program. The agenda will focus on legislative changes mandated by the Medicare Improvements for Patients and Providers Act of 2008 as well as additional process improvements. CMS expects that the feedback received from the PAOC committee members and the public will assist the Agency as it moves forward with the Round 1 Rebid.   The registration deadline is May 29, 2000.

*** A Reed Smith report on the PAOC meeting, including the slides/handouts from the PAOC meeting, is posted elsewhere on the Health Industry Washington Watch site.

 

 

DMEPOS Competitive Bidding

On April 17, 2009, CMS announced that it is not further delaying implementation of its January 16, 2009 interim final rule with comment period making changes to the Medicare durable medical equipment, prosthetic, orthotics and supplies (DMEPOS) competitive bidding program. The effective date of the rule had previously been delayed from February 17, 2009 until April 18, 2009 to give HHS officials the opportunity for further review of the issues of law and policy raised by the rule.  CMS notes that its decision to allow the rule to go into effect will have “no immediate effect on the Medicare DMEPOS benefit and Medicare beneficiaries may continue to use their current DMEPOS suppliers at this time.” CMS will be issuing future guidance on the timeline for the Round 1 re-bid, which must take place in 2009 under the Medicare Improvements for Patients and Providers Act of 2008.

 

Negative Pressure Wound Therapy (NPWT) Pumps

The OIG has released a report entitled "Comparison of Prices for Negative Pressure Wound Therapy Pumps," which asserts that Medicare is overpaying for NPWT pumps. Among other things, the OIG found Medicare reimbursement for NPWT pumps is more than four times the average price paid by suppliers, which makes pumps “vulnerable to fraud, waste, and abuse." The OIG recommends that CMS use its inherent reasonableness authority to reduce the reimbursement amount for NPWT pumps and include pumps in DMEPOS competitive bidding. CMS also should educate suppliers of new pump models on the importance of communication with beneficiaries' treating clinicians and follow up on potentially-inappropriate claims. CMS generally concurred with the recommendations.

DMEPOS Competitive Bidding Rule Delay

The Centers for Medicare & Medicaid Services (CMS) has published a notice announcing a delay in the effective date of its January 16, 2009 interim final rule with comment period implementing certain changes to the Medicare durable medical equipment, prosthetic, orthotics and supplies (DMEPOS) competitive bidding program mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Specifically, the effective date has been delayed from February 17, 2009 until April 18, 2009 to give HHS officials the opportunity for further review of the issues of law and policy raised by the rule. CMS is seeking comments until March 23, 2009 on the delay. CMS points out that the original comment period on the January 16 rule remains unchanged; the public has until March 17, 2009 to submit comments on the substantive policy issues discussed in the rule.  

MIPPA DMEPOS Bidding Rule Effective Date Delayed

On February 19, 2009, CMS published a notice announcing that it is delaying the effective date of the January 16, 2009 interim final rule with comment period implementing certain changes to the Medicare durable medical equipment, prosthetics, orthotics, and supplies ("DMEPOS") competitive bidding program mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Specifically, the effective date has been delayed from February 17, 2009 until April 18, 2009 to give Department officials the opportunity for further review of the issues of law and policy raised by the rule.  Comments on the delay will be accepted until March 23, 2009. Note that the original comment period on the January 16 rule remains unchanged; the public has until March 17, 2009 to submit comments on the substantive policy issues discussed in the rule.

Congressional Hearings

A number of Congressional panels have held hearings recently on health policy issues, including the following:

  • The Senate Health, Education, Labor and Pensions (HELP) Committee has held hearings on "Crossing the Quality Chasm in Health Reform" and “Implementing Best Patient Care Practices.” The HELP Committee also has scheduled a hearing for February 17 on “Improving Care Through Innovation.”  
  • The House Small Business Committee held hearings on health care reform, the employer-provided health care outlook, and the impact of DMEPOS competitive bidding on small businesses. 
  • The Senate Budget Committee held a hearing on “Key Issues and Budget Options for Health Reform.” 

Comment Opportunity on MIPPA DMEPOS Competitive Bidding Rule (Due Feb. 12, 2009)

On February 10, 2009, CMS is publishing a notice announcing an additional comment period on its January 16, 2009 interim final rule implementing certain changes to the Medicare DMEPOS competitive bidding program mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). That rule implements certain MIPPA provisions that delay implementation of Round 1 of the competitive bidding program; require CMS to conduct a second Round 1 competition in 2009; and mandate certain changes in the program, including a process for providing feedback to suppliers regarding missing financial documentation and a requirement for contractors to disclose to CMS information on subcontracting relationships. 

CMS is considering a 60-day delay in the original February 17, 2009 effective date to allow CMS officials the opportunity to further review the issues of law and policy raised by the rule, consistent with a broader regulatory review announced by the Obama Administration on January 20, 2009. CMS is soliciting comments on the potential delay, along with general comments on the rule. The deadline for comments under the new solicitation is February 12, 2009

The official Federal Register version of the notice will be available February 10. 

DMEPOS Competitive Bidding

On January 16, 2009, the Centers for Medicare & Medicaid Services (CMS) published an interim final rule with comment period to implement the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)Among other things, the rule codifies MIPPA provisions: delaying implementation of bidding and requiring CMS to conduct a second Round 1 competition in 2009; establishing a process to provide feedback to suppliers on missing financial documentation; requiring bidders to disclose information regarding subcontractors; and exempting certain DMEPOS items from bidding. CMS also notes that it intends to require one, rather than three, years of financial records to be submitted with future bids. In addition, CMS invites comments on alternatives for diabetic supplies bidding, which will be the subject of future rulemaking. The rule is effective February 17, 2009, but CMS will accept comments on the rule until March 17, 2009. A Reed Smith analysis of the MIPPA DMEPOS competitive bidding provisions is available here. In a related development, CMS announced the appointment of new members of the Program Advisory and Oversight Committee (PAOC), which advises the agency on the competitive bidding program.

2009 Medicare DMEPOS Fee Schedule Released

CMS has released the 2009 Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) fee schedule. The update reflects payment changes mandated by the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008. Specifically, MIPPA reduces the nationwide fee schedule amount of most items included in Round 1 of the DMEPOS competitive bidding program by 9.5% for 2009 (six oxygen codes included in Round 1 will receive a 0% update rather than the 9.5% reduction). Non-competitive bid items will receive a 5.0% update for 2009. 

Medicare DMEPOS Competitive Bidding Advisory Committee Member Solicitation

On October 2, 2008, CMS published a notice soliciting nominations for individuals to serve on the Program Advisory and Oversight Committee (PAOC), which advises the Secretary of Health and Human Services on Medicare competitive bidding program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).   CMS has a particular interest in individuals with expertise in DMEPOS and competitive bidding, as well as experience in furnishing services and items in the rural and the urban marketplace.   CMS will select 10-12 PAOC members representing beneficiaries, physicians, suppliers, professional standards organizations, financial standards specialists, and association representatives, among others.  These individuals will replace the previous members of the PAOC (although CMS could reappoint previous members).  Nominations are due November 3, 2008.    

DMEPOS Accreditation

On September 3, 2008, CMS is hosting a Special Open Door Forum to provide guidance to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) providers on the supplier accreditation provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).  MIPPA states that eligible professionals and other persons are exempt from meeting the September 30, 2009 accreditation deadline until CMS determines that the quality standards are specifically designed to apply to such professionals and other persons.  MIPPA also states that CMS may exempt such professionals and persons from the quality standards based on their licensing, accreditation or other mandatory quality requirements that may apply.  The call will take place from 2 pm-3:30 pm Eastern Daylight Time. To participate, dial: 1-800-837-1935 and Reference Conference ID: 61231070. 

Medicare Physician Payment/DMEPOS Bidding Delay Legislation Enacted

On July 15, 2008, the House and Senate overrode the President's veto of H.R. 6331, the “Medicare Improvements for Patients and Providers Act of 2008” (MIPPA).  The law rescinds a 10.6% cut in physician payments and delays a controversial medical equipment competitive bidding program, both of which temporarily went into effect July 1, 2008, and makes numerous other Medicare and Medicaid policy changes.  Highlights of the law include the following:

  • Physician Payments: MIPPA cancels a 10.6% Medicare physician fee schedule cut that was triggered on July 1, 2008 and provides a 1.1% increase for 2009 (rather than the forecasted 5.4% cut).  The law also expands the Physician Quality Reporting Initiative, promotes electronic prescribing, and requires non-hospital advanced imaging providers to be accredited by 2012.

 

  • DMEPOS Competitive Bidding.  MIPPA delays and reforms the Centers for Medicare & Medicaid Services’ (CMS) competitive bidding program for certain categories of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS).  H.R. 6331 terminates contracts awarded under round one, rebids those areas in 2009, and delays round two bidding until 2011.  The delay is financed by cutting fee schedule payments for round one items by 9.5% nationwide beginning January 1, 2009.  MIPPA also includes a series of procedural improvements to the bidding process. A detailed Reed Smith analysis of the MIPPA DMEPOS bidding provisions is available on our website.
  • Therapy Caps Exception Process.  MIPPA extends through December 31, 2009 the outpatient therapy service cap exceptions process.
  • Clinical Laboratory Services.  The act repeals the clinical lab competitive bidding demonstration project and reduces the clinical lab fee schedule update by 0.5% in each of the next 5 years.
  • Medicare Advantage (MA) Provisions.  MIPPA makes a series of MA payment and policy changes, including a $1.8 billion cut in the regional MA stabilization fund in 2012 and a phase-out of the adjustment for indirect medical education. 
  • Medicare Part D Drug Plans.  MIPPA sets timeframes for plan payments to pharmacies and long-term care pharmacy submission of claims; mandates coverage of certain classes of drugs; clarifies the use of Part D drug data; limits certain sales and marketing activities; and makes other Part D reforms. 
  • End-Stage Renal Disease (ESRD) Provisions.  The law updates the ESRD composite rate by 1.0% for 2009 and 2010, and mandates a fully-bundled ESRD payment system and quality incentive program by January 1, 2011.
  • Medicaid Drug Reimbursement.  MIPPA delays the adoption of Medicaid payment based on average manufacturer price (AMP) for multiple source drugs and prevents publication of AMP data until October 1, 2009.

Reed Smith is preparing a client memo analyzing the new law, which will be available on our web site.  

CMS Guidance on MIPPA Implementation.

When MIPPA was enacted July 15, 2008, it included a number of retroactive Medicare policy provisions. CMS has begun providing guidance on implementation of these provisions, including the positive update in the physician fee schedule, the reinstatement of the therapy cap exception process, and the ability of all suppliers to furnish items in the first round DMEPOS competitive bidding areas (CBAs) at fee schedule rates. Likewise, CMS has announced that as a result of MIPPA enactment, the special accreditation deadlines previously established for the second round of the DMEPOS competitive bidding program have been cancelled, although the September 30, 2009 deadline for accreditation of all DMEPOS suppliers still is in effect. 

OIG Guidance on MIPPA/Waiver of Copayments

Certain retroactive payment increase provisions in MIPPA result in increased beneficiary copayment amounts for certain items and services furnished from July 1 through July 14, 2009. As a result, beneficiaries who already paid or were billed for cost-sharing amounts based on lower prices temporarily in effect are liable for additional cost-sharing amounts. On July 24, 2008, the OIG issued a policy statement assuring suppliers and providers affected by retroactive rate increases that they will not be subject to OIG administrative sanctions if they waive retroactive beneficiary cost-sharing amounts attributable to those increased payment rates (subject to certain conditions). The policy impacts the following types of items and services: physician fee schedule services; certain DMEPOS in the initial bidding areas; brachytherapy sources and therapeutic radiopharmaceuticals under the outpatient prospective payment system; and ambulance services. Note, however, that suppliers and providers are not required to waive retroactive beneficiary liability, and they may instead choose to bill the beneficiary for the additional copayment obligation. 

MIPPA: Medicare Physician Payment/DMEPOS Bidding Delay Legislation Enacted

On July 15, 2008, the House and Senate overrode the President's veto of H.R. 6331, the  "Medicare Improvements for Patients and Providers Act of 2008” (MIPPA).  The law rescinds a 10.6% cut in physician payments and delays a controversial medical equipment competitive bidding program, both of which went into effect July 1, 2008, and makes numerous other Medicare and Medicaid policy changes. The vote was 70-26 in the Senate and 383-41 in the House, following the President's veto earlier in the day. 

The following are highlights of the legislation:

  • Physician Fee Schedule: MIPPA maintains physician payment rates for 2008 (rather than implement the 10.6% cut that was triggered on July 1, 2008), and provides a 1.1% increase for 2009 (rather than the forecasted 5.4% cut). The law also extends for two years the Physician Quality Reporting Initiative (PQRI), increases incentive payments for reporting by 2%, and makes other reforms to the program. The act promotes electronic prescribing (e-prescribing) by providing incentive payments for practitioners who use a qualified e-prescribing systems in 2009 through 2013, and reducing payments by 2% for providers practitioners who fail to e-prescribe beginning in 2011 (with limited exceptions). MIPPA also requires non-hospital advanced imaging providers to be accredited by 2012 and establishes a voluntary demonstration program to test the use of appropriateness criteria for advanced diagnostic imaging services.
  • DMEPOS Competitive Bidding.  MIPPA delays and reforms the Centers for Medicare & Medicaid Services' (CMS) competitive bidding program for certain categories of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The first round of the program went into effect in 10 geographic areas on July 1, 2008. H.R. 6331 terminates contracts awarded under round one and rebids those areas in 2009, with bidding for round two delayed until 2011. The delay is financed by cutting fee schedule payments for all items covered by round one bidding program by 9.5% nationwide beginning January 1, 2009, followed by a 2% increase in 2014 (with certain exceptions). MIPPA also includes a series of procedural improvements to the bidding process, and addresses quality by, among other things, requiring subcontractor accreditation, excluding complex rehabilitation wheelchairs and negative pressure wound therapy from bidding, and exempting of certain rural and low-population areas from bidding. Separately, MIPPA repeals current oxygen equipment transfer of ownership requirements.
  • Therapy Caps Exception Process.  MIPPA extends through December 31, 2009 the exceptions process relative to the annual per-beneficiary limitations on outpatient therapy services.
  • Clinical Laboratory Services. The act repeals the competitive bidding demonstration project for clinical laboratory services and instead reduces the fee schedule update for clinical lab services by 0.5% in each of the next 5 years.
  • Medicare Advantage (MA) Provisions. MIPPA makes a series of payment and policy changes affecting Medicare Advantage plans, including a $1.8 billion cut in the MA stabilization fund for regional preferred provider organizations in 2012 and a phase-out of the adjustment for indirect medical education. 
  • Medicare Part D Drug Plans. MIPPA establishes timeframes for plan payments to pharmacies and long-term care pharmacy submission of claims; codifies current coverage of certain “protected classes” of drugs; clarifies the use of Part D drug data for research and other purposes; limits certain sales and marketing activities; and makes other Part D reforms. 
  • End-Stage Renal Disease Provisions. The law provides a 1.0% update to the composite rate for renal dialysis services for 2009 and 2010, requires the Secretary to establish a fully bundled ESRD payment system by January 1, 2011, and establishes a quality incentive payment program for ESRD providers, effective January 1, 2011.
  • Medicaid Drug Reimbursement. MIPPA delays the adoption of Medicaid payment based on average manufacturer price (AMP) for multiple source drugs and prevent publication of AMP data until October 1, 2009.

Additional details regarding the legislation are available on the House Ways and Means Committee web site.

DMEPOS Competitive Bidding Program

The first round of the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program went into effect July 1, 2008 in 10 geographic areas for selected categories of products, although legislation has been approved by Congress that would delay the first round of bidding and make other reforms in the bidding process (see related legislative story).   Nevertheless, CMS continues to provide guidance to suppliers, beneficiaries, and referral sources on implementation of the new program.   For instance, CMS has issued new manual provisions with special billing instructions for claims subject to the DMEPOS competitive bidding program.  CMS also has clarified the distinctions between retail and mail order suppliers for purposes of competitive bidding (mail order diabetes supplies, but not retail supplies, are subject to bidding).  Moreover, CMS has updated the Supplier Directory on www.medicare.gov to reflect the names of contract suppliers (although CMS has noted that the database may not yet be complete). For more information, see the CMS web site.

DMEPOS Competitive Bidding Delay Legislation Introduced

Key members of Congress are seeking to delay CMS’s controversial program to implement competitive bidding for certain categories of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The first round of the program is scheduled to go into effect in 10 geographic areas on July 1, 2008, followed by bidding in 70 additional areas later this year. There have been widespread concerns, however, about the way the bidding process was handled, the adequacy of beneficiary and supplier education efforts, and the potential impact of the program on beneficiary access to DMEPOS. As a result, a bipartisan legislation has been introduced by the Chairmen and Ranking Republicans on the Senate Finance Committee and House Ways and Means Health Subcommittee to delay the program, institute offsetting fee schedule reductions, and make a series of reforms to the program. 

Specifically, H.R. 6252/S. S.3118 would, among other things:

  • Terminate contracts awarded under round one and rebid those areas. New round one contracts would take effect in 18 to 24 months. Round two contracts could not take effect before January 2011 and payment adjustments for DMEPOS in non-competitive bid areas could not take effect until round two is completed.
  • Fully offset the costs of the bill by eliminating the inflation update for all items covered by Round 1 of the competitive bidding program and reducing payment rates for those items by 9.5 percent nationwide beginning January 1, 2009, followed by a 2 percent increase in 2014 (except where bidding is in effect or CMS has otherwise adjusted rates). 
  • Make a series of procedural improvements to the bidding process, including requiring CMS to notify bidders about paperwork discrepancies and giving suppliers the opportunity to correct problems.
  • Include a number of quality improvements, including subcontractor accreditation requirements and disclosure of subcontracting arrangements, exclusion of complex rehabilitation wheelchairs and negative pressure wound therapy from bidding, and exemption of certain rural and low-population areas from bidding.

Lawmakers are seeking to include this legislation in broader physician payment reform legislation, but it also could be considered as a stand-alone measure before the July 1, 2008 implementation date for round one. Additional information about the legislation is available here.

DMEPOS Competitive Bidding/PAOC Meeting

CMS has scheduled a June 16, 2008 meeting of the Program Advisory and Oversight Committee (PAOC) in Pikesville, Maryland. The registration deadline is June 12.

DMEPOS Competitive Bidding Developments

In preparation for implementation of the first phase of the Medicare DMEPOS competitive bidding program on July 1, 2008, CMS has been posting new educational resources on its web site. Recent publications include new "tip sheets" for grandfathered suppliers and referral sources (e.g., providers and home health agencies) and an educational article explaining new Medicare manual instructions related to the bidding program.