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.