FACT SHEET
FOR IMMEDIATE RELEASE
March 15, 2016
Contact: CMS Media Relations
(202) 690-6145 | CMS
Media Inquiries
COMPETITIVE BIDDING PROGRAM CONTINUES TO MAINTAIN
ACCESS AND QUALITY WHILE SAVING MEDICARE BILLIONS
Overview
The Centers for Medicare & Medicaid
Services (CMS) today announced the new single payment amounts and began sending
contract offers to successful bidders for Medicare’s Round 2 Recompete and the
national mail-order recompete Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. These new payment
amounts and contracts go into effect on July 1, 2016. This program has been an
essential tool to help Medicare set appropriate payment rates for DMEPOS items
and save money for beneficiaries and taxpayers while ensuring access to quality
items.
Prior to the DMEPOS Competitive
Bidding Program, Medicare paid for these DMEPOS items using a fee schedule that
is generally based on historic supplier charges from the 1980s. Numerous
studies from the Department of Health and Human Services Office of Inspector
General and the Government Accountability Office have shown these fee schedule
prices to be excessive, and taxpayers and Medicare beneficiaries bear the
burden of these excessive payments.
Under the Competitive Bidding
Program, DMEPOS suppliers compete to become Medicare contract suppliers by
submitting bids to furnish certain items in competitive bidding areas. After the first two years of Round 2 and the national
mail-order programs (July 1, 2013-June 30 2015), Medicare has saved
approximately $3.6 billion while health monitoring data indicate that its
implementation is going smoothly with few inquiries or complaints and no
changes to beneficiary health outcomes.
The Round 2 and national mail-order
program contract periods expire on June 30, 2016. Round 2 Recompete and the
national mail-order recompete contracts will become effective on July 1, 2016
through December 31, 2018. The national mail-order recompete for diabetes
testing supplies will be implemented at the same time as Round 2 Recompete and
will include all parts of the United States, including the 50 States, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American
Samoa.
Background
The Medicare DMEPOS Competitive
Bidding Program was established by the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (“Medicare Modernization Act” or “MMA”) after the
conclusion of successful demonstration projects. Under the MMA, the DMEPOS Competitive
Bidding Program was to be phased in so that competition under the program would
first occur in 10 Metropolitan Statistical Areas (MSAs) in 2007. The Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA) temporarily delayed
the program in 2008 and made certain limited changes. In accordance with MIPPA,
CMS successfully conducted the supplier competition again in nine areas in
2009, referring to it as the Round 1 Rebid.
MIPPA also delayed the competition
for Round 2 from 2009 to 2011 and authorized national mail-order competitions
after 2010. The Affordable Care Act of 2010 (ACA) expanded the number of
Round 2 MSAs from 70 to 91 and specified that all areas of the country be
subject to either DMEPOS competitive bidding or payment rate adjustments using
competitively bid rates by January 1, 2016.
Competitive bidding contracts and
pricing have been in place in Round 1 areas since January 1, 2011 with the
current Round 1 Recompete contracts and prices being in place since January 1,
2014. CMS is currently evaluating bids received as part of the Round 1 2017
competition, which is scheduled to be implemented on January 1, 2017.
Round 2 and the national mail-order
program for diabetes testing supplies was implemented on July 1, 2013. The supplier
bidding period for Round 2 Recompete and the national mail-order recompete for
diabetes testing supplies concluded on March 26, 2015.
Contract
Award Process
The DMEPOS Competitive Bidding
Program’s bid evaluation process ensures that there will be a sufficient number
of suppliers to meet the needs of the beneficiaries living in a competitive
bidding area. The new single payment amounts resulting from the competition
replace the previous single payment amounts for the bid items in these areas.
Small suppliers, those with gross revenues of $3.5 million or less, make up
about 56 percent of the suppliers that will be offered contracts for Round 2
Recompete. 22 percent of national mail-order contract offers are going to
small suppliers. All suppliers that are offered contracts went through a
thorough vetting process and are accredited and meet financial and applicable
licensing standards.
CMS will now begin offering
contracts to winning bidders. 12,181 contract offers will be made to 637 Round
2 Recompete bidders. Of these offers, 93 percent are to bidders who
currently furnish items in the awarded area or within the product category. The
winning suppliers have 2,341 locations to serve Medicare beneficiaries in the
competitive bidding areas. CMS will offer 9 contracts for the national
mail-order program. CMS expects to complete the contracting process in
time to announce the contract suppliers in the spring of 2016. Bidders
that are not offered contracts will be notified of the reasons why they did not
qualify for the program when the contracting process is complete. Suppliers
that are not contract suppliers for this round of the DMEPOS Competitive
Bidding Program may bid in future rounds, unless they are precluded from
participation in the program.
Additional information on the distribution of contract offers is available
at the following Web site: www.dmecompetitivebid.com.
REAL-TIME MONITORING
Importantly, the program has
maintained beneficiary access to quality products from accredited suppliers in
all competitive bidding areas. Extensive real-time monitoring data have shown
successful implementation with very few beneficiary complaints and no negative
impact on beneficiary health status based on measures such as hospitalizations,
length of hospital stay, and number of emergency room visits compared to
non-competitive bidding areas. In addition to our real-time claims
monitoring, CMS also requested feedback from beneficiaries through consumer
satisfaction surveys conducted before and after the rollout of the program. CMS
provides local, on-the-ground presence in each competitive bidding area through
the CMS regional offices, local liaisons, and a Competitive Acquisition
Ombudsman who closely monitors and responds to inquiries and complaints about
the application of the program from beneficiaries who use items of DMEPOS under
the program, contract suppliers who provide these items, and other
stakeholders. There is also a formal complaint process for beneficiaries,
caregivers, providers and suppliers to use for reporting concerns about
contract suppliers or other competitive bidding implementation issues. In
addition, contract suppliers are responsible for submitting reports identifying
the brands of products they furnish, which is used to inform beneficiaries,
caregivers, and referral agents. CMS will continue to employ the same
aggressive program monitoring for future rounds.
ROUND 2 RECOMPETE PRODUCT CATEGORIES AND AREAS
The Round 2 Recompete product
categories are:
- Enteral Nutrients , Equipment, and Supplies
- General Home Equipment and Related Supplies and
Accessories
- includes hospital beds
and related accessories, group 1 and 2 support surfaces, commode chairs,
patient lifts, and seat lifts
- Nebulizers and Related Supplies
- Negative Pressure Wound Therapy (NPWT) Pumps and
Related Supplies and Accessories
- Respiratory Equipment and Related Supplies and
Accessories
- includes oxygen, oxygen
equipment, and supplies; continuous positive airway pressure (CPAP)
devices and respiratory assist devices (RADs) and related supplies and
accessories
- Standard Mobility Equipment and Related Accessories
- includes walkers,
standard power and manual wheelchairs, scooters, and related accessories
- Transcutaneous Electrical Nerve Stimulation (TENS)
Devices and Supplies
For a list of the specific items in
each product category, or for a list of the areas included in Round 2
Recompete, visit the Competitive Bidding Implementation Contractor website at www.dmecompetitivebid.com.
Round 2 Recompete and National
Mail-Order recompete Timeline of Events
March 15,
2016 CMS announces
new payment rates for Round 2 Recompete and the national mail-order recompete
and begins contracting process with winning suppliers
Spring 2016
CMS announces the Medicare contract suppliers for Round 2 Recompete and the
national mail-order recompete; intensifies supplier, referral agent, and
beneficiary education program
July 1, 2016
Implementation of Medicare DMEPOS Competitive Bidding Program Round 2 Recompete
and national mail-order recompete contracts and prices
ADDITIONAL INFORMATION
For additional information about the Medicare DMEPOS Competitive Bidding Program, please visit: http://www.cms.hhs.gov/DMEPOSCompetitiveBid/.
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