1. Schaum, Kathleen D. MS

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The Medicare Durable Medical Equipment, Prosthetics, Orthotics, & Suppliers (DMEPOS) Competitive Bidding Program was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The statute required that Medicare replace the current fee schedule payment methodology for selected DMEPOS items with a competitive bid process. The intent was to improve the effectiveness of the Medicare methodology for setting DMEPOS payment amounts, which also reduces beneficiary out-of-pocket expenses and saves the Medicare program money while ensuring beneficiary access to quality items and services.


A competition was conducted among suppliers who operated in particular competitive bidding areas (CBAs). The suppliers were required to submit a bid for selected medical equipment and supplies, such as hospital beds and accessories, negative-pressure wound therapy pumps and supplies, support surfaces (groups 1 and 2), and so on. Not all products or items were subject to competitive bidding; for example, surgical dressings were not included.


The bids were evaluated based on the supplier's eligibility, its financial stability, and the bid price. Contracts were awarded to the Medicare suppliers who offered the best prices and met the applicable financial, quality, and accreditation standards. Medicare used the bids to set the amount it paid for competitive bid items in each CBA. The suppliers who were awarded contracts were required (1) to accept assignment on all claims for the competitive bid items and (2) to be paid the single amount that Medicare established from the submitted bids.


The Competitive Bidding Program was officially launched in 2011. If Medicare beneficiaries wanted Medicare to help pay for items in the Competitive Bidding Program, they had to obtain those items from one of the contracted suppliers. Extensive real-time monitoring data showed successful implementation with very few beneficiary complaints and no negative impact on beneficiary health status. In addition to monitoring, the Centers for Medicare & Medicaid Services (CMS) (1) requested feedback from beneficiaries through consumer satisfaction surveys and (2) provided presence in each CBA through the CMS regional offices, local liaisons, and a Competitive Acquisition Ombudsman. Several rounds of competitive bidding took place after 2011. The Round 1, 2017, Round 2 Recompete, and National Mail Order Competitive Bidding Program contracts ended on December 31, 2018.


Because of a delay in the announcement of the next round of competitive bids, a temporary gap period in the Competitive Bidding Program began on January 1, 2019. The CMS expects the gap will last until December 31, 2020. During the temporary gap, any Medicare-enrolled DMEPOS supplier may furnish DMEPOS items and services to people with Medicare in the former CBAs. Although people with Medicare in the former CBAs can switch their DMEPOS supplier, most will not need to switch suppliers because suppliers must continue to furnish the following:


* Capped rental items (such as wheelchairs and hospital beds) through the remainder of the 13-month rental period. At the end of the 13th month, the title for the equipment must be transferred from the supplier to the person with Medicare who is using the equipment.


* Oxygen and oxygen equipment through the remainder of the 36-month rental period. After the 36th continuous month of Medicare payment, the supplier is required to continue providing the oxygen and oxygen equipment during any period of medical need for the remainder of the 5-year reasonable useful lifetime of the oxygen equipment.



NOTE: Exceptions to these two requirements exist if people with Medicare travel or permanently move outside their supplier's normal service area.


People with Medicare may have to switch to another supplier for all other DMEPOS items if their current supplier is not willing to continue providing the items on or after January 1, 2019. If you order DMEPOS items for people with Medicare in former CBAs, you may want to remind them to


* use the Medicare Supplier directory at to locate a supplier;


* call 1-800-MEDICARE (1-800-633-4227) to locate a supplier, ask a question, or file a complaint;


* ask whether their supplier accepts Medicare assignment; if not, the person with Medicare could be responsible for paying higher coinsurance costs;


* beware of aggressive marketing by suppliers:


-Do not let anyone persuade them to switch suppliers. Talk to their supplier first because they may not need to make a change.


-Remember that Medicare and Medicaid do not send representatives to their homes to sell products or services.


-Do not be influenced by certain media advertising. Many television and radio ads do not have patients' best interest at heart.


-Report fraud using the Health and Human Services Office of Inspector General's online form at


-Call the Fraud Hotline of the Health and Human Services Office of Inspector General at 1-800-HHS-TIPS (1-800-447-8477).



Many wound care stakeholders and durable medical equipment (DME) suppliers have called this author regarding the Medicare allowable payment rates in former CBAs during the temporary gap period. Effective January 1, 2019, payment for all items and services that were included in the Competitive Bidding Program are based on the lower of the following: (1) the supplier's charge for the item or (2) fee schedule amounts that were adjusted based on the Single Payment Amounts for each specific CBA, increased by the projected percentage change in the Consumer Price Index for all Urban Consumers for the 12-month period ending January 1, 2019. These fee schedule amounts are different than the fee schedule amounts for items furnished in all other nonbid areas, or areas that were not CBAs as of December 31, 2018.


Different fee schedule files reflect these new allowable rates. The normal DMEPOS fee schedule file will be used by DME Medicare Administrative Contractors to pay claims in all nonbid areas or areas that were not CBAs as of December 31, 2018. A second fee schedule file will be used by DME Medicare Administrative Contractors to pay claims for equipment and supplies that were included in the Competitive Bidding Program and that are furnished in areas that were CBAs as of December 31, 2018. The following 2019 allowable fee schedule files can be found at


* The Former CBA ZIP Code file displays the CBAs as of December 31, 2018. It lists the CBA State, all ZIP codes included in that CBA, the short name of the CBA, and the full name of the CBA.


* The Former CBA Fee Schedule file displays the 2019 Medicare allowable rates in each former CBA.


* The DMEPOS file displays the 2019 Medicare allowable rural and nonrural rates for nonbid areas, or areas that were not CBAs as of December 31, 2018. Because there are different DMEPOS allowable rates for rural and nonrural areas of the country, the DME Rural Code file displays the ZIP codes in each state that are considered rural.



To get an idea of the difference between the 2019 Medicare allowable rates in former CBAs versus the rest of the state's rates, this author used the above files to research the rates for negative-pressure wound therapy pumps (Healthcare Common Procedure Coding System code E2402) and accessories (Healthcare Common Procedure Coding System code A6550; Table). This author was surprised to see that some 2019 allowable rates in former CBAs were higher than the rest of the state rates. Further, this author found the files very easy to use and recommends readers use them to research the 2019 Medicare allowable rates of other equipment and supplies.