The Medicare law gives CMS the discretion to phase in the types of DMEPOS items to be subject to competitive bidding. In evaluating an item's savings potential and selecting the items to be subject to bidding, CMS considered the amount of allowed charges, the growth in expenditures, the number of suppliers of the item, savings realized in the DMEPOS competitive bidding demonstration projects, and reports and studies by entities such as the Health and Human Services Office of Inspector General and the Government Accountability Office.

In order to qualify for a contract under the competitive bidding program, a supplier must generally meet certain criteria, including:


* Be in good standing with the Medicare program and not under any current sanctions by Medicare or any governmental agency or accreditation or licensing organization.

* Have an active National Supplier Clearinghouse (NSC) number.

* Meet any local or state licensure requirements for the item being bid;

* Submit a bid as a prerequisite to becoming a winning supplier.

* Be accredited or have an application for accreditation pending in order to participate in bidding.

* Provide capacity estimates of the number of units for each item included in the product category that the supplier would be capable of furnishing under the program.

* Agree to service the entire CBA regardless of where the beneficiary is located, although the supplier will not be required to be capable of servicing 100 percent of the beneficiaries in that geographic area.

If a supplier has multiple locations in a competitive bidding area, then it must submit a single bid for all of its locations and if the supplier is selected as a contract supplier, than all of its locations within the CBA would be considered to be contract suppliers. This will help ensure geographic distribution of suppliers.

In developing the DMEPOS competitive bidding program, CMS built on experiences gained during DMEPOS competitive bidding demonstrations conducted in Polk County, Florida and San Antonio, Texas from 1999 through 2002. The two demonstration sites proved successful in terms of generating substantial program savings, maintaining consumer access and satisfaction, upholding the quality of items, preserving competition and administrative feasibility.

Additional information on the DMEPOS competitive bidding program, including the CBAs and competitive bidding items for the first round of competitive bidding, is available at the following web site:

http://www.cms.hhs.gov/CompetitiveAcqforDMEPOS/Downloads/CMS-1270-F.pdf

Back to HCB News

More Industry Headlines