01/10/2008
CMS Announces Round Two of DMEPOS Competitive Bidding
Includes Tennessee’s Four Major Metropolitan Areas

In a press conference held January 8^th, CMS unveiled plans for the Second Round of expansion of the Medicare DMEPOS Competitive Bidding Program, which will cover Tennessee’s four largest MSAs—Nashville, Memphis, Knoxville and Chattanooga. This announcement greatly impacts which suppliers will be allowed to provide certain DME products, as well as what Medicare reimbursement they will receive.  All DME suppliers wishing to participate in the program will need to prepare and submit a bid to CMS in the near future, and will need to be accredited by a CMS-recognized organization in order to participate.

This Second Round will expand the program to an additional 70 MSAs, including the four major Tennessee MSAs, and include 8 of the top DME product categories.  The current Round One of bidding encompassed 10 MSAs.  The bidding by DME suppliers in those markets has closed, with the winners not expected to be named until March and the new pricing expected to go into effect in these areas on July 1^st.

CMS expects throughout the spring to provide more detailed information regarding Round Two, including announcing the affected zip codes in each MSA, specifying the items included in each product category, and beginning supplier registration for the online bid submittal system.   CMS expects to open the actual Round Two bidding this summer. 

Further details as to the affected product categories and other impacted MSAs may be found at http://www.cms.hhs.gov/CompetitiveAcqforDMEPOS .

Background on DMEPOS Competitive Bidding Program

The DMEPOS Competitive Bidding Program was created by the Medicare Prescription Drug, Improvement and Modernization Act of 2003.   The Act requires that CMS replace the current DMEPOS payment system for select, highly utilized supplies with a competitive bidding process.  CMS has been implementing the program thus far through the use of pilot rollouts and the Round One bidding process.  Generally, suppliers in a competitive bidding area bid to supply the covered items, with the winning bids used to establish a Single Payment Amount (“SPA”) for each item.  Those winning bidders who sign contracts must agree, among other conditions, to be compensated at the SPA rate for each item.

In order to participate in the Medicare DMEPOS Competitive Bidding Program, suppliers must meet quality standards and be accredited by a CMS-approved Deemed Accreditation Organization.  Suppliers must be accredited or be pending accreditation to submit a bid.  CMS cannot accept a bid from any supplier that is not accredited or that has not applied for accreditation.  Suppliers must be accredited by the time contracts are awarded.  Accordingly, CMS is encouraging DME suppliers considering bidding under the program to start the accreditation process as soon as possible.

If you have questions about the impact of the Round Two of the Competitive Bidding Program, or need assistance in preparing to bid under the program, please contact Jack Thompson or any of Boult Cummings Conners and Berry , PLC’s Health Care Operations and Compliance Team.