CMS Ramps Up Competitive Bidding, Round Two

LOS ANGELES — In a press conference held earlier today,
the U.S. Department of Health and Human Services and the Centers
for Medicare and Medicaid Services announced the expansion of
Medicare’s DMEPOS national
competitive bidding program.

The extended bidding program is “designed to help lower Medicare
beneficiaries’ out-of-pocket costs and reduce fraud and abuse while
improving access to high-quality durable medical equipment,
prosthetics, orthotics and supplies,” according to HHS.

“Competitve bidding means that Medicare beneficiaries will have
access to these products at lower costs,” said CMS Acting
Administrator Kerry Weems. “All successful bidders will be required
to meet quality standards and be accredited by Medicare. People
with Medicare … will be assured of access, low prices and high
quality.

“Through the certification process, beneficiaries will be given
another layer of protection from fraud,” Weems continued. “We
welcomed this program when it was created by the Congress because
we believed it could help lower costs for our beneficiaries and
help us in our efforts to keep the small number of dishonest
providers from taking advantage of American seniors.”

Once competitive bidding is fully implemented, Weems said, “we
expect that it will save Medicare beneficiaries and the Medicare
program about $1 billion a year. By replacing the current fee
schedule payment amounts for these items and supplies, which in
many cases are significantly higher than market prices with the
payment amounts currently determined by the fee-setting process …
competitive bidding provides a way to harness the marketplace, in
which suppliers will provide items and services in an efficient
manner and at a reasonable cost to our beneficiaries.”

Weems said CMS’ experience with competitive bidding
demonstrations in Florida and San Antonio, Texas, which concluded
in 2002, “reached an overall savings of nearly 20 percent in each
project, without impairing beneficiary access and while improving
quality.

“We expect that the program will defer fraud by eliminating
those providers from the competitive bidding program, because
suppliers will have to be accredited by the Medicare program.
Suppliers will need to meet the high quality standards,” he
said.

Weems also noted it is important for suppliers who want to
participate in Round Two of bidding “to apply for their
accreditation as soon as possible to make sure that they have
adequate time to be evaluated.”

CMS recently announced the final deadline for all suppliers to
obtain accreditation is Sept. 30, 2009. However, the agency noted
in a release subsequent to today’s press briefing that suppliers
participating in the second phase of the competitive bidding
program will have to be accredited “well in advance of that
deadline to be awarded a contract with CMS.”

With winners from Round One of the bidding project not yet
announced–that is expected in March–NCB’s next round will add 70
competitive bidding areas to the program, including New York, Los
Angeles and Chicago. The nation’s three largest MSAs were excluded
from the initial phase of bidding, which was rolled out in 10
cities in 2007, to simplify the first phase of the program. Pricing
from the first round of bidding is currently scheduled to take
effect July 1 this year.

Selected based on “a variety of factors, including high price
and high utilization,” Weems said eight products will be subject to
Round Two bidding, including:

1 – Oxygen Supplies and Equipment
2 – Standard Power Wheelchairs, Scooters, and Related
Accessories
3 – Complex Rehabilitative Power Wheelchairs and Related
Accessories
4 – Enteral Nutrients, Equipment, and Supplies
5 – Continuous Positive Airway Pressure (CPAP) Devices, Respiratory
Assist Devices (RADs), and Related Supplies and Accessories
6 – Hospital Beds and Related Accessories
7 – Negative Pressure Wound Therapy (NPWT) Pumps and Related
Supplies and Accessories
8 – Walkers and Related Accessories

The MSAs selected for Round Two bidding include:

CMS said it expects to begin pre-bidding activities for the
second round, such as announcing the specific zip codes that
constitute the CBAs, specific items in each product category and
bidder education and registration for user IDs and passwords, in
the spring of 2008.

According to the agency, the bidding period is expected to run
60 days and is planned to begin in the summer of 2008. CMS said a
more detailed timeline will be provided as the pre-bidding
activities begin.

A full announcement about Round Two of the Medicare DMEPOS
competitive bidding program can be found at
www. cms.hhs.gov/CompetitiveAcqforDMEPOS.

For continuing coverage of competitive bidding, check future
issues of HomeCare Monday.