CMS has announced the names of 282 suppliers that have been awarded 3-year contracts under the Medicare DME, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program “Round 1 Recompete.” As discussed in our previous reports, this phase of bidding applies to nine geographic areas where competitive bidding contracts have been in effect since 2011, but it includes a broader array of products than currently covered. The contract period for the Round 1 Recompete is January 1, 2014 through December 31, 2016.
By way of background, under DMEPOS competitive bidding, only suppliers that are winning bidders, meet licensing and other standards, and enter into a contract with CMS may furnish selected categories of DMEPOS to Medicare beneficiaries in competitive bidding areas (CBAs), with very limited exceptions. Contract suppliers are paid based on the median of the winning suppliers’ bids in the CBA, rather than the DMEPOS fee schedule amount. CMS reported earlier this year that Medicare reimbursement will be cut by an average of 37% compared to fee schedule amounts under the Round 1 Recompete contracts, which include the following six product categories: (1) Respiratory Equipment and Related Supplies and Accessories (includes oxygen, oxygen equipment, and supplies; continuous positive airway pressure devices and respiratory assist devices, and related supplies and accessories; and standard nebulizers); (2) Standard Mobility Equipment and Related Accessories (includes walkers, standard power and manual wheelchairs, scooters, and related accessories); (3) General Home Equipment and Related Supplies and Accessories (includes hospital beds and related accessories, group 1 and 2 support surfaces, transcutaneous electrical nerve stimulation devices (TENS), commode chairs, patient lifts, and seat lifts); (4) Enteral Nutrients, Equipment and Supplies; (5) Negative Pressure Wound Therapy Pumps and Related Supplies and Accessories; and (6) External Infusion Pumps and Supplies.
CMS reports that Round 1 Recompete contract suppliers have 620 locations to serve Medicare beneficiaries in the CBAs, and about 58% of these suppliers are “small suppliers” with gross revenues of $3.5 million or less. CMS will now accelerate educational efforts aimed at suppliers, referral agents, and beneficiaries in preparation for the new contracts.