Medicare Competitive Bidding Program on Durable Medical Equipment

The Medicare program is continuing an effort to get better prices on Durable Medical Equipment and allied supplies through a bidding process that competes the prices that Medicare pays for these rather than establishing the prices by the current method of using a fee schedule set by the program. Medicare tried this on a pilot basis in Florida and Texas a number of years ago and it appeared to be successful in helping beneficiaries by lowering prices and improving customer service. The entire issue of using competition or direct federal negotiation rather than the current regulatory processes to lower health care costs for Medicare beneficiaries is a hugely controversial and rather politicized issue, but my guess is that in the future we will see these new processes used to deal with the relentless rise in health care costs.

Note that this competitive bidding program is will go into effect on January 1, 2011, but only in selected areas of the nation, and it will apply only to certain , items of equipment and supplies. (And while this technically only involves those of you in Original Medicare, those of you in Medicare Advantage may be affected and you need to carefully check with your Plan before you purchase or rent any of the involved items, but, of course, it’s always wise to do that when you are in Medicare Advantage.)

These are the metropolitan areas it will apply to; note that some cover more than one state. If you live in these areas, or if you visit one and get one of the involved items while you are there, you need to get them from a “contract” supplier. And all contract suppliers must take assignment, an important protection for beneficiaries. Medicare is publicizing its competitive activities in these areas as they proceed, and this will help let you know if you are affected and how.

California: Riverside – San Bernadino – Ontario
Florida: Miami – Fort Lauderdale – Pompano Beach
Florida: Orlando Kissimmee
Missouri and Kansas: Kansas City
North and South Carolina: Charlotte – Gastonia – Concord
Ohio, Kentucky and Indiana: Cincinnati – Middletown
Ohio: Cleveland – Elyria – Mentor
Pennsylvania: Pittsburgh
Texas: Dallas – Fort Worth – Arlington

You can find a contract supplier by calling 1-800-MEDICARE or by going to www.Medicare.gov, clicking on “Resource Locator,” and then on “Medical Equipment Suppliers,” and entering your zip.

These are the items, that is, the equipment and supplies which will be included in the competition:

Oxygen, oxygen equipment and supplies
Standard power wheelchairs and scooters
Certain complex rehabilitative wheelchairs
Mail-order diabetic supplies
Enteral nutrients, equipment and supplies
Certain respiratory devices, specifically:
Continuous positive airway pressure devices
Respiratory assist devices
Hospital beds and related accessories
Walkers and related accessories
Certain support surfaces (mattresses, overlays), but only in the
Florida: Miami – Fort Lauderdale – Pompano Beach area

Basically, beginning on January 1, 2011, anytime you rent or purchase an item or supply on this list while you reside in or visit the areas mentioned, you will have to get it from a supplier which has a contract with Medicare under the competitive bidding program. If you do not, Medicare will not pay anything. As with any Medicare activity, exceptions to this rule can apply. Note that doctors, treating practitioners (such as physical therapists) and hospitals may supply certain items. A skilled nursing facility or nursing home can’t, however, unless it becomes a contract supplier. And if you are renting one of the affected pieces of equipment from a supplier when the program goes into effect on January 1, 2011, and that supplier elects to be “grandfathered in,” you can continue to rent that item from your supplier. But if they are not, you need to change suppliers as Medicare will not pay anything on your equipment.