Home Health & Hospice Week

Will you qualify for an exemption to competitive bidding?

The DME Medicare world is changing, and suppliers that fail to change with it will be left out in the cold when competitive bidding and other pricing changes take effect. Hoping for a repeal of the durable medical equipment competitive bidding provisions contained in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 is wishful thinking, experts say. "In the long term, competitive bidding appears to be a steadily building force," says attorney John Wester with Sidley Austin Brown & Wood in Washington, DC. "As long as competitive bidding is viewed as a cost-saving step, future efforts to forestall competitive bidding will probably face resistance that is at least as formidable as in 2003," Wester tells Eli. At most, suppliers may be able to convince lawmakers to limit the items subject to the bidding process, he predicts. Since there is likely to be no going back on bidding, suppliers had better master the details of the complicated procedure to survive, and thrive, under the new reimbursement system when it takes effect. For 10 metropolitan statistical areas, the program will begin in 2007. By 2009, bidding will take over in 80 MSAs. And the law leaves the potential for a nationwide model by 2009 as well, Wester noted in a Jan. 13 teleconference reviewing the law signed by President Bush in December. Here are some important details suppliers should consider in their bidding preparations: Grandfathering. Not all Medicare business for bidding items will terminate for suppliers that don't win the bidding contracts, Wester pointed out. Patients receiving oxygen and rental DME won't have to switch to the winning bidder. Instead, relationships with those patients will be grandfathered, according to the law, Wester explained. Exclusions. Inhalation drugs, parenteral nutrition and equipment, and Class III medical devices won't be subject to the bidding process, the law says. Items for which savings aren't expected also will be exempt. And low-density areas are off the hook as well, Wester said. Mergers and acquisitions. There's more than one way to skin a cat, and bidding hopefuls won't have to give up if they don't win a contract right off the bat. The law specifies that if a winning DME company is sold, its successor organization will retain the bidding contract with Medicare. The industry may see strategic acquisitions given the provisions allowing successors a "second bite at the apple" by buying winning bidders, Wester predicted. Challenges. But suppliers shouldn't expect to get a second chance through administrative or legal challenges to decisions on bidding winners, MSA areas or the items up for bid - the Medicare law specifically prohibits those. "Whatever Medicare comes up with will [...]