Nevertheless, suppliers would be advised to understand what is expected of them:

CMS Requirements
Under Medicare's competitive bidding program, suppliers that wish to offer certain items and services to people with Medicare will have to submit bids to CMS, indicating the prices at which they are willing to supply these items to beneficiaries - prices that CMS believes will be closer to the prices charged in the current market. Currently Medicare - and beneficiaries - pay for items based on a fee schedule that, in general, is based on the average payments Medicare has paid for DMEPOS items in the past. Although the fee schedule is updated annually, CMS believes it is not representative of the true market prices of these items and services. Most beneficiaries pay 20 percent of the total cost for these items and services and should expect to see savings from this program because when the total cost decreases, beneficiaries' coinsurance also decreases, according to CMS.
Suppliers must also meet high quality standards established by CMS and be accredited by one of ten organizations chosen by Medicare. CMS announced the standards in August, 2006, and the names of the accrediting organizations in November of that year. The final deadline for all suppliers to obtain an initial accreditation is September 30, 2009. However, suppliers that want to participate in this second phase of the competitive bidding program will have to be accredited well in advance of that deadline to be awarded a contract with CMS.

"I cannot stress enough the importance for all Part B DMEPOS suppliers to apply for accreditation early, and not wait until September 30, 2009," Weems said. "Suppliers considering participating in the second phase of the competitive bidding program should apply for accreditation immediately."

The competitive bidding program also includes special considerations for small suppliers, and options for beneficiaries in the competitive bidding areas (CBAs) who have existing rental agreements with suppliers that are not chosen as winning bidders in the competition.

In developing the DMEPOS competitive bidding program, CMS built on successful experiences gained during DMEPOS competitive bidding demonstrations conducted in Polk County , Fla. , and the San Antonio , Texas , areas from 1999 through 2002.

The CMS expects to begin pre-bidding activities of the second round, such as announcing the specific zip codes that constitute the CBAs, specific items in each product category, and bidder education and registration for user IDs and passwords, in the spring of 2008. The bidding period is expected to run 60 days and is planned to begin in the summer of 2008. A more detailed timeline will be provided as the pre-bidding activities begin.

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