DMEPOS Competitive Bidding

CMS has adopted a number of changes to its Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) policies for 2017, including new competitive bidding program (CBP) requirements and revisions to the methodology for updating Medicare DMEPOS fee schedule amounts based on CBP pricing.

With regard to the CBP, the final rule implements a Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provision requiring entities bidding in the DMEPOS competitive bidding program to submit proof of an authorized “bid surety bond” for each competitive bidding area (CBA) in which the supplier is bidding. Under the final rule, the surety bond amount will be set at $50,000 – rather than $100,000 as proposed — for each CBA associated with the bid.  If the bidder is offered but declines a contract for any product category in the CBA, and the supplier’s bid for the product category was at or below the median composite bid rate used to calculate single payment amounts, the bid bond will be forfeited, and CMS will collect on the bond.  In all other cases, the bid bond will be returned to the bidder within 90 days of CMS’s public announcement of the contract suppliers for the CBA.  The rule establishes penalties for bidders that provide falsified surety bonds or accept a contract offer and then renege on it in order to avoid surety bond forfeiture.
Continue Reading CMS Finalizes New Rules for Bidders in Medicare DMEPOS Competitive Bidding Program, Revises DMEPOS Fee Schedule Update Policies

CMS has announced the single payment amounts for Round 1 2017 of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) competitive bidding program.  As previously reported, this round represents a recompete (with product category changes) of the current Round 1 Recompete contracts, which expire December 31, 2016.  Round 1 2017 contracts will apply from January 1, 2017 through December 31, 2018.
Continue Reading DMEPOS Bidding Round 1 2017 Single Payment Amounts Announced

CMS has proposed a series of complex and detailed revisions to Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) policies for 2017, including changes to the competitive bidding program (CBP) requirements and adjustments to DMEPOS fee schedules based on CBP pricing. The proposed DMEPOS policies are included in the Medicare ESRD PPS proposed rule for CY 2017.

With regard to the CBP, CMS proposes to implement a Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provision requiring entities bidding in the DMEPOS competitive bidding program to submit proof of an authorized “bid surety bond” for each competitive bidding area (CBA) in which the supplier is bidding. Under the proposed rule, the surety bond amount would be set at $100,000 for each CBA associated with the bid. If the bidder is offered a contract for any product category in the CBA, and the supplier’s bid for the product category was at or below the median composite bid rate used to calculate single payment amounts, the bid bond would be forfeited and CMS would collect on the bond if the supplier does not accept the contract. In all other cases, the bid bond would be returned to the bidder within 90 days of CMS’s public announcement of the contract suppliers for the CBA. This provision is intended to prevent suppliers from submitting – but not accepting — “low-ball” bids that artificially drive down prices to improve the supplier’s chances of being offered a contract.   The rule also addresses penalties for bidders that provide falsified surety bonds or accept a contract offer and then renege on it in order to avoid surety bond forfeiture.
Continue Reading CMS Proposes Changes to Medicare DMEPOS Competitive Bidding & Fee Schedule Update Policies

The Centers for Medicare & Medicaid Services (CMS) has published its proposed rule to update the Medicare end-stage renal disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2017. CMS anticipates that the proposed rule would increase overall Medicare payments to ESRD facilities by 0.5 percent in 2017 compared with CY 2016 levels (with a slightly higher increase – 0.7 percent — for hospital-based ESRD facilities). This update reflects a 0.35 percent market basket increase and the application of wage index and self-dialysis training budget-neutrality adjustment factors. The proposed CY 2017 ESRD PPS base rate is $231.04, compared to the CY 2016 base rate of $230.39.
Continue Reading CMS Issues Proposed CY 2017 Medicare ESRD PPS Update

CMS has released the July 1, 2016 update to Medicare durable medical equipment (DME) prosthetic orthotics and supplies (DMEPOS) fee schedule amounts in non-competitive bidding areas, reflecting full implementation of adjustments to nationwide rates based on DMEPOS competitive bidding program (CBP) pricing. As previously reported, the Affordable Care Act mandates that CMS use pricing information from competitive bidding to adjust DME fee schedule amounts for items furnished in areas where the CBP is not implemented. CMS is implementing these adjustments in two steps. For the period January 1, 2016 through June 30, 2016, CMS is basing fee schedule amounts on a blend of 50% of the fee schedule amount that would have gone into effect on January 1, 2016 if not adjusted based on information from the CBP, and 50% of the adjusted fee schedule amount.  Beginning July 1, 2016, CMS will implement new fee schedules reflecting 100% of the adjusted fee schedule amounts. The July 1 rates will also reflect new pricing information from the Round 2 Recompete and National Mail Order Recompete programs.

According to a CMS fact sheet announcing the July 1 rates, the cumulative cuts to DMEPOS fee schedule amounts under the fully-adjusted rates are substantial, with fees for many items reduced by 50% – 80% compared to 2015 rates, as illustrated in the following table:
Continue Reading CMS to Slash Medicare DMEPOS Rates on July 1, 2016

As previously reported, the Affordable Care Act mandates that CMS use pricing information from the durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program (CBP) to adjust Medicare fee schedule amounts for items furnished in areas where the CBP is not implemented.  CMS is phasing in these adjustments.  Specifically, effective January

CMS recently released the names of the new contract suppliers under the Round 2 Recompete of the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program and the national mail-order competition for diabetes supplies. The CMS announcement was followed shortly by release of an HHS Office of Inspector General (OIG) report that

CMS has just released the single payment amounts for the Round 2 Recompete of the Medicare DMEPOS competitive bidding program and the national mail-order competition for diabetes supplies.  In today’s announcement, CMS stated it will be offering 12,181 contracts to 637 Round 2 Recompete bidders, along with 9 contracts for the national mail-order program for contracts that take effect on July 1, 2016.  The “winning” supplier names have not yet been made public; CMS anticipates announcing the contract suppliers in the spring.

CMS did not release data comparing the single payment amounts to current fee schedule payments, but the agency notes that during the first two years of Round 2 and the national mail-order programs (July 1, 2013-June 30 2015), Medicare saved approximately $3.6 billion as a result of the contract rates.  These savings are likely to continue to grow as a result of the recompete.

As previously reported, the Round 2 Recompete will cover 90 metropolitan statistical areas/117 competitive bidding areas, while the national mail-order recompete for mail-order diabetic testing supplies includes all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa.  This round includes the following categories of items and services:
Continue Reading CMS Announces Single Payment Amounts for July 1, 2016 DMEPOS Competitive Bidding Contracts

On December 28, 2015, President Obama signed into law S. 2425, the Patient Access and Medicare Protection Act, which includes a number of Medicare provisions that were not included in the Consolidated Appropriations Act. Most significantly, the law:

  • Extends the timeframe for eligible professionals and hospitals to apply for a hardship exception from meaningful

Today CMS released the Medicare durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) fee schedule for the first half of 2016 – reflecting the agency’s first adjustments to nationwide rates based on DMEPOS competitive bidding program (CBP) pricing. As previously reported, the Affordable Care Act mandates that CMS use pricing information from competitive bidding to adjust DME fee schedule amounts for items furnished in areas where the CBP is not implemented.  On November 6, 2014, CMS published its methodology to make such adjustments, which included a phase in of adjusted payments over six months.  Specifically, effective January 1, 2016 through June 30, 2016, the adjusted fee schedule amounts are based on a blend of 50% of the fee schedule amount that would have gone into effect on January 1, 2016, if not adjusted based on information from the CBP, and 50% of the adjusted fee schedule amount.  Beginning July 1, 2016, the adjusted fee schedule amounts will reflect 100% of the adjusted fee schedule amounts. Notwithstanding this transition period, DMEPOS suppliers nationwide still will be subject to steep cuts on January 1 for many items that have been subject to CBP.  For instance, CMS issued a fact sheet listing the following average 2015 fees and average 2016 blended fees for the contiguous United States (both for urban areas and rural areas) for select items, effective January 1, 2016 (rates will be subject to fully-adjusted rates effective July 1, 2016):
Continue Reading CMS Releases 2016 Medicare DMEPOS Fee Schedule – Reflecting Steep Cuts Based on DMEPOS Competitive Bidding Rates

On August 11, 2015, CMS announced the detailed timeline for “Round 1 2017” of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. As previously reported, this round represents a recompete (with product category changes) of the current Round 1 Recompete contracts, which expire December 31, 2016. The following are the major anticipated dates for the Round 1 2017 competition:
Continue Reading CMS Announces Timeline for the DMEPOS Competitive Bidding Round 1 2017 Competition

CMS has removed the non-invasive pressure support ventilators product category from Round 1 2017 of the Medicare DMEPOS Competitive Bidding Program. The agency also is revising the HCPCS coding for ventilators in response to what it characterizes as program abuse related to inappropriate billing of HCPCS code E0464 Pressure Support Ventilators (non-invasive). Specifically, CMS

On April 21, 2015, CMS announced its plans to recompete the supplier contracts awarded under the Round 1 Recompete of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program, as the statute requires CMS to do at least every three years.  The current Round 1 Recompete contract period expires December 31, 2016; the new “Round 1 2017” contracts are scheduled to go into effect January 1, 2017. 

For the recompete, CMS is making limited changes to the composition of the product categories and the number of competitive bidding areas (CBAs). The product categories to be included in the Round 1 2017 competition are as follows: Continue Reading CMS Announces Recompete of Round 1 of the Medicare DMEPOS Competitive Bidding Program for 2017

Today President Obama signed into law H.R. 2, the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), which reforms Medicare payment policy for physician services and adopts a series of policy changes affecting a wide range of providers and suppliers. Most notably, MACRA permanently repeals the statutory Sustainable Growth Rate (SGR) formula, achieving a goal that has eluded Congress for years. Now, after a period of stable payment updates, MACRA will link physician payment updates to quality, value measurements, and participation in alternative payment models.
Continue Reading President Obama Signs MACRA: Permanently Reforms Medicare Physician Reimbursement Framework, Includes Other Health Policy Provisions

Yesterday the House of Representatives approved the following health policy bills:

  • H.R. 284, the Medicare DMEPOS Competitive Bidding Improvement Act of 2015 – which would require Medicare suppliers that bid under a DME, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to obtain a $50,000-$100,000 bid surety bond for each competitive bidding area (CBA). 

On March 16, 2015, the House of Representatives is scheduled to consider the following health policy legislation:

  • H.R. 284, the Medicare DMEPOS Competitive Bidding Improvement Act of 2015 — which would require Medicare suppliers that bid under a DME, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to submit binding bids or risk forfeiture

On February 26, 2015, the House Ways and Means Committee is scheduled to vote on the following bills:

  • H.R. 1021, “Protecting the Integrity of Medicare Act of 2015” – a sweeping bill to promote Medicare program integrity and efficiency. Among many other things, the bill would: eliminate civil money penalties for inducements to physicians to