Home Health & Hospice Week

It's official: The final rule implementing Medicare's new competitive bidding program is here at last--leaving nearly 6,000 suppliers only about two months to try to hold onto their Medicare revenue.

The regulation--"Competitive Acquisition for Certain Durable Medical Equipment, Orthotics and Supplies"--was released April 2.

Timeframe: The Centers for Medicare & Medicaid Services will phase in the program in several stages, with bidding starting in 10 large metropolitan areas by the end of this month. That round will include 10 types of home medical equipment and supplies, with the competitive bidding prices on those items set to take effect April 2008. By April 2009, competitive bidding will come to 70 additional areas.

Background: The final rule establishes a competitive bidding program for DMEPOS furnished to Medicare beneficiaries under Medicare Part B, a Medicare Modernization Act of 2003 requirement.

CMS' release of the 400-plus page final rule will be a loud wake-up call for many suppliers, says Jeffrey Baird, attorney with Brown & Fortunato in Amarillo, TX.

Though CMS touted added protections for small providers upon the rule's release, Baird and others caution that small firms--about 85 percent of DME suppliers--won't fare well under competitive bidding.

"The more I learn about the program, the more I am convinced that the true motive is not cost-savings [for Medicare] but cutting down on the number of suppliers," asserts Baird.

Other key provisions: The final rule specifies the geographic areas and items included in the first round of bidding. And it clarifies the role of physicians and other clinicians who sometimes provide off-the-shelf orthotics and other DME directly to patients.

DME providers intent on staying in the Medicare market should take in the final rule quickly, says Maryellen Conway, president of Capital Healthcare Group in Bethesda, MD. CMS plans to open bidding by late April, with all bids due within 60 days from the start of bidding.

"Think about it: In about 75 days, bidding will close," sums up Conway. "That's not long."

CMS, on the other hand, will have until next April to do its part: sorting through the bids and awarding contracts, Conway notes.

Major requirement: In addition to calling for prompt bidding, the new rule charges suppliers with securing accreditation--quickly.

"If you aren't accredited, you will not be a winning supplier," said Leslie Norwalk, CMS' acting administrator, during a press briefing on April 2.

Translated: If you are not accredited, you will be able to bid, but if you haven't achieved accredited status by the time CMS awards contracts, you may be  out of luck. The language in the final rule says contracts will be awarded only to suppliers who are accredited or who have "pending" applications, notes Eric Sokol of the Power Mobility Coalition.