The Centers for Medicare & Medicaid Services (CMS) announced on January 8 the seventy Metropolitan Statistical Areas (MSAs) and eight product categories that will be involved in the second phase of competitive bidding for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). When added to the MSAs included in the first phase of the program, there will be eighty MSAs involved in competitive bidding, including the three largest MSAs- New York, Los Angeles and Chicago.
The competitive bidding program for Medicare DMEPOS was established pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Under the program, suppliers that wish to provide designated items and services to Medicare beneficiaries in designated geographic areas must submit bids to CMS indicating the prices at which they are willing to supply the items. Based on the bids submitted, CMS selects suppliers to contract with to furnish items for a product category in a competitive bidding area. CMS anticipates beginning the pre-bidding activities of the second phase of the program in the spring of 2008.
In addition to competitive bidding, the MMA required the Secretary of the Department of Health and Human Services to establish quality standards for suppliers of DMEPOS. CMS recently set a deadline of September 30, 2009 by which all Part B suppliers must obtain accreditation by one of the ten accrediting organizations chosen by CMS. No supplier may be permitted to provide DMEPOS items and services to Medicare beneficiaries after that date unless the supplier is duly accredited.
Suppliers that wish to participate in the second phase of competitive bidding will have to be accredited well in advance of the September 30, 2009 deadline. According to CMS Acting Administrator Kerry Weems, "[s]uppliers considering participating in the second phase of the competitive bidding program should apply for accreditation immediately."
The goals of the accreditation and competitive bidding program are to reduce the cost to Medicare of DMEPOS and to decrease fraud. CMS estimates that once the competitive bidding program is fully implemented, it will save the Medicare program approximately $1 billion annually.
Additional information on the second phase of competitive bidding for DMEPOS, including information on the seventy MSAs where bidding will occur and the eight product categories that will be affected, is available at http://www.cms.hhs.gov/CompetitiveAcqforDMEPOS/01_overview.asp.
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