All Original Medicare Beneficiaries Are Actually or Potentially Affected by New Durable Medical Equipment and Supply Rules Effective July 1, 2013

Medicare is expanding its competitive bidding program for durable medical equipment (DME) and allied supplies. This program is formally called the Medicare’s Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). This expansion is called “Round 2” because the first round went into effect on January 1, 2011, and has been deemed a success in that it significantly lowered prices paid on these items and supplies. This competitive bidding program requires suppliers in a particular area to go through a bidding process to establish the prices that Medicare pays for certain durable medical equipment items and supplies rather than establishing the prices by the general method of using a fee schedule set by the Medicare program. And only those who successfully bid may be paid by Medicare. 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 controversial and rather politicized issue, but we will undoubtedly see more of it in the future.

Basically, beginning on July 1, 2013, anytime you rent or purchase an item or supply on the list of items and supplies involved in this program 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, and these are discussed below. And it’s worth repeating, the place where you get the item or supply governs, so even if you travel to one of these areas and get an item or supply on the list there, you must use a contract supplier for Medicare to pay anything.

And, interestingly, the price you pay for an item or supply will depend on where you reside. Your residence is determined by what address is in the records of the Social Security Administration; you can contact it (1-800-772-1213) if you address is out-of-date or incorrect.

To simplify this as much as possible, I am dividing this into four audiences, but remember that all of this applies only to beneficiaries in Original (fee-for-service) Medicare. (Those of you in Medicare Advantage need to carefully check with your Plan before you purchase or rent any durable medical equipment or supplies and follow your Plan’s instructions, which you should do whenever you are in Medicare Advantage no matter what medical service, item or supply you use.)


Mail Order Diabetic Supplies

The first audience is everyone in Original (fee-for-service) Medicare no matter where you live. Effective with July 1, 2013, if you order your diabetic supplies by mail, and these include test strips for home glucose monitors and lancets, only certain mail order suppliers will be approved by Medicare. So use only these. And if you don’t want your diabetic testing supplies delivered to your home, you can go to any local store that’s enrolled with Medicare and buy them there. The amount Medicare pays will be the same for diabetic testing supplies you buy at the store or have delivered to your home. Local stores also can’t charge more than any unmet deductible and 20% coinsurance if they accept assignment, which means they accept the Medicare-approved amount as payment in full. Local stores that don’t accept Medicare assignment may charge you more than 20% coinsurance and any unmet deductible. If you get your supplies from a local store, check with the store to find out what your payment will be.


New Areas and Items (Round 2)

Second, if you live in or travel to any state except Alaska, Maine, Montana, the Dakotas, Vermont and Wyoming, at least part of your state will be coming into this program effective with July 1, 2013. You need to look at the list of metropolitan statistical areas (MSAs) which will be coming into this program on that date (It’s a long list, and it’s at the very end of this post.) to see if you are affected. You can also call 1-800-MEDICARE and ask if your home’s ZIP code, or the ZIP code you have traveled to, is in any of these areas. Alternatively, you can go onto www.medicare.gov/supplier and enter your ZIP code.

The following categories of items and supplies are the ones which will be included in the new Round 2. Items and supplies not on this list may be obtained from any Medicare approved supplier (except, of course, diabetic supplies by mail).

Oxygen, oxygen equipment, and supplies
Standard (power and manual) wheelchairs, scooters, and related accessories
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Hospital beds and related accessories
Walkers and related accessories
Negative pressure wound therapy (NPWT) pumps and related supplies and accessories
Support surfaces (Group 2 mattresses and overlays)


Areas Already in the Competitive Bidding Program (Round 1)

And if you live in or travel to one of these eleven states California, Florida, Indiana, Kansas, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, or Texas – you may already be in a competitive bidding area. Specifically, this third audience is those of you who live in or travel to any of the metropolitan statistical areas (MSAs) listed below, all of which were in Round 1:

Cincinnati-Middletown, OH-KY-IN
Cleveland-Elyria-Mentor, OH
Charlotte-Gastonia-Concord, NC-SC
Dallas-Fort Worth-Arlington, TX
Kansas City, MO-KS
Miami-Fort Lauderdale-Pompano Beach, FL
Orlando-Kissimme, FL
Pittsburgh, PA
Riverside-San Bernardino-Ontario, CA

A new round of bidding will take place in these areas, and it will go into effect on July 1, 2014. It will use the list of items and supplies currently in effect for your area, with some modifications. This revised Round 1 list of items and supplies is shown below.

Oxygen, oxygen equipment, and supplies
Standard power wheelchairs, scooters, and related accessories
Complex rehabilitative power wheelchairs and related accessories (Group 2 only)
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Hospital beds and related accessories
Walkers and related accessories
Support surfaces (Group 2 mattresses and overlays in the Miami–Fort Lauderdale–Pompano Beach, FL area only)

(For the Round 1 recompete both negative pressure wound therapy (NPWT) items and services as well as Group 3 complex rehabilitative power wheel chairs have been deleted from the list used in the original Round 1 bid. As had mail order diabetic supplies as of January 1, 2013, but these will be subject to the program no matter where you live effective with July 1, 2013.)

For those of you who are already renting an item of DME or using supplies in these areas, it is possible that your current supplier may not win this new round of competition. If so, your supplier will have to inform you of this. And it may be that the price for an item or supply you are using may change because of the rebid.

Puerto Rico

The fourth audience is those Medicare beneficiaries who live in or travel to Puerto Rico, which was also in the Round 1 competition. Your list of items subject to the program will not change, nor will there be any recompete in your area, so the suppliers which are currently in the program will not change, nor will the Medicare prices established by the bidding process. Of course, you will be included in the national mail order diabetic supplies program as of July 1, 2013. But if you begin to buy or rent any of these items, or use any of these supplies, you should use only a contract supplier.

To recap, these are the items covered by the competitive bid program in Puerto Rico:
Oxygen, oxygen equipment, and supplies
Standard power wheelchairs, scooters, and related accessories
Complex rehabilitative power wheelchairs and related accessories (Groups 2 & 3)
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Hospital beds and related accessories
Walkers and related accessories
Negative pressure wound therapy (NPWT) items and services


Exeptions:

We mentioned above that there are exceptions to the rule that only contract suppliers can be paid by Medicare. Here is a recap of those exceptions.

Currently rented equipment If you’re currently renting durable medical equipment or oxygen and oxygen equipment, and your current supplier doesn’t bid successfully, you may be able to continue renting your equipment from that supplier if they decide to become a “grandfathered” supplier. Your supplier should already have notified you in writing if they’ll continue to rent you the equipment. If your supplier decides not to become a grandfathered supplier, they’ll notify you in writing to make arrangements to pick up the equipment. You should contact a contract supplier for new equipment.

If you continue to use a non-contract supplier that isn’t a grandfathered supplier for equipment or supplies that are part of the competitive bidding program, the supplier must give you an “Advance Beneficiary Notice” (ABN). This notice tells you that Medicare usually won’t pay for the item or service, and you may be responsible for paying the entire cost. If you don’t switch to a contract supplier, you will be responsible for the full cost of the item or/or supplies.

Repairs to already owned equipment If you already own medical equipment, you can use any Medicare-approved supplier for repairs. Before your equipment is serviced, make sure the supplier is Medicare-approved so the service may be covered. If your equipment needs to be replaced and it is one of the items subject to competitive bidding, you must use a Medicare contract supplier for Medicare to pay.

Certain walkers and wheelchairs furnished by certain practitioners and hospitals Medicare will pay for certain items, like a walker or folding manual wheelchair, furnished by your doctor or treating health care provider (including physician assistants, clinical nurse specialists, and nurse practitioners), even if he or she isn’t a Medicare contract supplier, as long as the item is supplied in the office during a visit for medical care and is medically necessary. If you’re hospitalized and need a walker or folding manual wheelchair, Medicare will also pay for these items furnished by the hospital while you’re admitted or on the day you’re discharged from the hospital. This does not apply to a skilled nursing facility or nursing home which supplies you with one of these items unless it is a contract supplier.

A specific brand or item is required by medical necessity If you need a specific brand of equipment or supplies, or you need an item in a specific form, your doctor must prescribe the specific brand or form in writing. Your doctor must also document in your medical record that you need this specific item or supply for medical reasons. In these situations, a Medicare contract supplier is required to furnish the exact brand or form of item you need, or help you find another contract supplier that offers that brand or form, or work with your doctor to find an alternate brand or form that’s safe and effective for you. But in these cases you must always use a contract supplier, even though the one you were originally referred to may not be able to obtain the specific item or supply for you.

Your primary insurance makes you use a supplier not in the bid program If your primary medical insurance requires you to use a supplier that doesn’t participate in the program, Medicare may make a secondary payment to that supplier. The supplier must meet Medicare enrollment standards and be eligible to get secondary payments. For more information, check with your benefits administrator, insurer, or plan provider.


Round 2 Areas

This is the list of all metropolitan statistical areas (MSAs) which are in Round 2; it is divided by area of the country: West, Midwest, South and Northeast:

West
Albuquerque, NM
Bakersfield - Delano, CA
Boise City-Nampa, ID
Colorado Springs, CO
Denver-Aurora-Broomfield, CO
Fresno, CA
Honolulu, HI
Las Vegas-Paradise, NV
Los Angeles-Long Beach-Santa Ana, CA
Oxnard-Thousand Oaks-Ventura, CA
Phoenix-Mesa-Glendale, AZ
Portland-Vancouver-Hillsboro, OR-WA
Sacramento-Arden-Arcade-Roseville, CA
Salt Lake City, UT
San Diego-Carlsbad-San Marcos, CA
San Francisco-Oakland-Fremont, CA
San Jose-Sunnyvale-Santa Clara, CA
Seattle-Tacoma-Bellevue, WA
Stockton, CA
Tucson, AZ
Visalia-Porterville, CA

Midwest
Akron, OH
Chicago-Joliet -Naperville, IL-IN-WI
Columbus, OH
Dayton, OH
Detroit-Warren-Livonia, MI
Flint, MI
Grand Rapids-Wyoming, MI
Huntington-Ashland, WV-KY-OH
Indianapolis-Carmel, IN
Milwaukee-Waukesha-West Allis, WI
Minneapolis-St. Paul-Bloomington, MN-WI
Omaha-Council Bluffs, NE-IA
St. Louis, MO-IL
Toledo, OH
Wichita, KS
Youngstown-Warren-Boardman, OH-PA

South
Asheville, NC
Atlanta-Sandy Springs-Marietta, GA
Augusta-Richmond County, GA-SC
Austin-Round Rock-San Marcos, TX
Baltimore-Towson, MD
Baton Rouge, LA
Beaumont-Port Arthur, TX
Birmingham-Hoover, AL
Cape Coral-Fort Myers, FL
Charleston-North Charleston-Summerville, SC
Chattanooga, TN-GA
Columbia, SC
Deltona-Daytona Beach-Ormond Beach, FL
El Paso, TX
Greensboro-High Point, NC
Greenville-Mauldin-Easley, SC
Houston-Sugar Land-Baytown, TX
Jackson, MS
Jacksonville, FL
Knoxville, TN
Lakeland-Winter Haven, FL
Little Rock-North Little Rock-Conway, AR
Louisville/Jefferson County, KY-IN
McAllen-Edinburg-Mission, TX
Memphis, TN-MS-AR
Nashville-Davidson-Murfreesboro-Franklin, TN
New Orleans-Metairie-Kenner, LA
Northport-Bradenton-Sarasota, FL
Ocala, FL
Oklahoma City, OK
Palm Bay-Melbourne-Titusville, FL
Raleigh-Cary, NC
Richmond, VA
San Antonio-New Braunfels, TX
Tampa-St. Petersburg-Clearwater, FL
Tulsa, OK
Virginia Beach-Norfolk-Newport News, VA-NC
Washington-Arlington-Alexandria, DC-VA-MD-WV

Northeast
Albany-Schenectady-Troy, NY
Allentown-Bethlehem-Easton, PA-NJ
Boston-Cambridge-Quincy, MA-NH
Bridgeport-Stamford-Norwalk, CT
Buffalo-Niagara Falls, NY
Hartford-West Hartford-East Hartford, CT
New Haven-Milford, CT
New York-Northern New Jersey-Long Island, NY-NJ-PA
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Poughkeepsie-Newburgh-Middletown, NY
Providence-New Bedford-Fall River, RI-MA
Rochester, NY
Scranton-Wilkes-Barre, PA
Springfield, MA
Syracuse, NY
Worcester, MA