CMS Issues Competitive Bidding Final Rule
By Mary Agnes Carey, CQ HealthBeat Associate Editor
The
Centers for Medicare and Medicaid Services (CMS) late Monday issued a
final rule for competitive bidding in Medicare for certain durable
medical equipment, prosthetics, orthotics and supplies.
In
a news release, CMS noted that in 2008 the competitive bidding program
will operate in competitive bidding areas within 10 of the largest
Metropolitan Statistical Areas (MSAs), excluding the New York, Los
Angeles and Chicago MSAs for logistical reasons.
The program will apply
to 10 of the top durable medical equipment, prosthetics, orthotics and
supplies, or DMEPOS, product categories outlined in the final rule.
The final rule will be published in the Federal Register on April 10.
The 10 MSAs where competitive bidding will begin later this year are:
Charlotte-Gastonia-Concord, N.C.-S.C.
Cincinnati-Middletown, Ohio-Ky.-Ind.
Cleveland-Elyria-Mentor, Ohio
Dallas-Fort Worth-Arlington, Texas
Kansas City, Kan-Mo.
Miami-Fort Lauderdale-Miami Beach, Fla.
Riverside-San Bernadino-Ontario, Calif.
Orlando-Kissimmee, Fla.
Pittsburgh, Pa.
San Juan-Caguas-Guaynabo, Puerto Rico
The
program will be expanded into 70 additional MSAs in 2009 and after 2009
CMS will expand the program to additional areas and items, agency
officials said.
“The final rule we are
announcing today is focused on improving both service delivery and the
quality of care, while getting savings for beneficiaries and
taxpayers,” CMS Acting Administrator Leslie V. Norwalk said in a
statement.
But some analysts said the new rule would force suppliers to close and hurt Medicare beneficiaries’ access to services.
“There
will be hundreds of small businesses in these 10 cities put of business
next year — an election year — with two cities located in each of the
key states of Ohio and Florida. Moreover, an untold number of Medicare
beneficiaries who are on oxygen now may lose their access to home
oxygen,” said Fred Graefe, a health care lobbyist whose clients include
home medical equipment manufacturers and hospitals.
The
competitive bidding program was mandated by the Medicare prescription
drug law (PL 108-173) and will replace current payment amounts for
items being bid under Medicare’s DMEPOS fee schedule with payment rates
derived from the bidding process. CMS said contracts would be awarded
to enough bidders in each competitive bidding area to ensure access and
service to high quality items.
When fully implemented by 2010, the competitive bidding program will save Medicare $1 billion annually, CMS said.
Durable
medical equipment (DME) was picked first for competitive bidding
because of the relatively small number of claims involved — 68 million
in fiscal 2004. After gaining experience with DME claims bidding, the
agency plans to extend it to hospital and doctor claims. (See related
story, CQ HealthBeat, April 24, 2006).
CMS is
creating a limited exception to the competitive bidding requirement
that will allow certain treating professionals — including physicians,
physician assistants and occupational and physical therapists —to
furnish items on the competitive bidding list to their own patients
without having to participate in bidding and without becoming a
contract supplier.
CMS also said it has
included several provisions to modify the rule’s impact on small
suppliers, defined as those having gross revenue of $3.5 million or
less annually. Those include a 30 percent target number for small
supplier participation and allowing small suppliers to form networks to
participate in the bidding process.
The 10 product categories that will be subject to competitive bidding are:
· Oxygen supplies and equipment;
· Standard power wheelchairs, scooters, and related accessories;
· Complex rehabilitative power wheelchairs and related accessories;
· Mail-order diabetic supplies;
· 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;
· Negative pressure wound therapy (NPWT) pumps and related supplies and accessories;
· Walkers and related accessories; and
· Support surfaces (Group 2 and 3 mattresses and overlays - Miami and San Juan only)
Okay, maybe not Brangelina-esque fame BUT...
