1. MEDICARE DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES (DMEPOS) COMPETITIVE BIDDING PROGRAM ROUND 1 REBID - What You Need to Know! Webinar Presentation – July 2009

2. What is DMEPOS? What is DMEPOS?  DMEPOS stands for  Durable Medical Equipment  Prosthetics  Orthotics  Supplies  Equipment and supplies covered under Medicare Part B

3. DMEPOS Facts  Medicare pays for durable medical equipment (DME) used in the home.  Some examples of DME include oxygen equipment, walkers, wheelchairs, devices used to treat sleep disorders, and hospital beds.  Over 9 million beneficiaries use DME each year.  Total allowed charges for DMEPOS in 2008 were $14.6 billion.  DMEPOS represents approximately 6 percent of Part B expenditures.

4. Current DMEPOS Payment Methodology  As required by the Medicare law, Medicare has paid for most DME on a fee schedule basis since January 1, 1989.  Any qualified, enrolled supplier can furnish DMEPOS.  Medicare pays 80 percent of the lesser of the actual charge for the item or the fee schedule amount for the item; the beneficiary pays the remaining 20%.

5. What is Competitive Bidding?  Competitive Bidding is a way to help Medicare pay appropriately for DMEPOS.  DMEPOS suppliers submit bids for selected DMEPOS products in selected areas; Medicare’s payments will be based on bids.  Qualified suppliers that submit competitive bids are offered Medicare contracts.

6. What is Competitive Bidding?  When the program goes into effect, beneficiaries who live in or visit competitive bidding areas will need to use Medicare contract suppliers in most situations to buy or rent competitively bid DMEPOS equipment or supplies for Medicare to pay.  Under the new program, Medicare’s DMEPOS payment rates will be less, so a beneficiary’s 20% coinsurance payments will be less too.

7. What Are the Benefits?  Beneficiary and taxpayer costs are reduced as a result of overall competitive bidding program savings.  Competitive bidding creates incentives for DMEPOS suppliers to provide high quality products and services to Medicare beneficiaries efficiently at a reasonable cost.

8. What Are the Benefits?  Competitive bidding ensures a sufficient number of DMEPOS suppliers is available to meet the expected demand for a product in each competitive bidding area.  Competitive bidding requires DMEPOS suppliers to meet certain quality and financial standards that reduce fraud in the Medicare program while establishing fair, market-based prices.

9. History of Competitive Bidding  The new program builds on successful demonstrations.  The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 mandated the development and implementation of the program.  The program was in place briefly in 2008.  On July 15, 2008, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), delayed the program and made limited changes.

10. Competitive Bidding - MIPPA Changes MIPPA ChangesResults Delayed program and requires Round 1 Rebid competition in 2009 in nearly all of the same areas for most of the same items that were included in 2008. Later Rounds of the program also delayed. Allows time to make additional refinements to the competitive bidding program. Establishes a process to give suppliers feedback on missing financial documents required to be submitted with bids. Suppliers that submit documents timely will have the opportunity to submit missing financial documents. Requires contract suppliers to notify Medicare of subcontracting relationships and that each subcontractor meets supplier accreditation requirements. Helps Medicare ensure that quality products and services are being provided. Provides limited exemption to the competitive bidding program for hospitals. Hospitals that only furnish walkers during inpatient stay or upon discharge don’t have to bid.

11. Who will be Affected?  The program will affect beneficiaries who have Original Medicare and who  Permanently live in a competitive bidding area or  Obtain competitively bid items while visiting a competitive bidding area.  Medicare Advantage enrollees can use suppliers designated by their plan.

12. Where are the Round 1 Rebid Areas?  Cincinnati – Middletown (Ohio, Kentucky and Indiana)  Cleveland – Elyria – Mentor (Ohio)  Charlotte – Gastonia – Concord (North Carolina and South Carolina)  Dallas – Fort Worth – Arlington (Texas)  Kansas City (Missouri and Kansas)  Miami – Fort Lauderdale – Miami Beach (Florida)

13. Where are the Round 1 Rebid Areas?  Orlando (Florida)  Pittsburgh (Pennsylvania)  Riverside – San Bernardino – Ontario (California)

14. What are the Round 1 Rebid Products?  Oxygen and Oxygen equipment  Standard Power Wheelchairs, Scooters, and Related Accessories  Complex Rehabilitative Power Wheelchairs and Related Accessories (Group 2)  Mail-Order Diabetic Supplies  Enteral Nutrients, Equipment and Supplies

15. What are the Round 1 Rebid Products?  Continuous Positive Pressure Airway Devices and Respiratory Assist Devices and Related Accessories  Hospital Beds and Related Accessories  Walkers and Related Accessories  Support surfaces (e.g., powered mattresses) –in Miami only

16. What is Grandfathering?  Beneficiaries who are currently renting DMEPOS products from noncontract suppliers may choose to continue to rent from the same supplier until their rental agreement expires if that supplier decides to become a grandfathered supplier.  Suppliers will provide advance notification to the beneficiary to tell them they have not been awarded a contract and whether they will continue furnishing the items as a grandfathered supplier or will no longer furnish the item.

17. What is Grandfathering?  Contract suppliers and noncontract suppliers will work together to ensure a smooth transition.

18. Beneficiary Protections  Competitive bidding ensures a sufficient number of qualified DMEPOS suppliers is available to meet the expected demand for a product in each competitive bidding area. Additional contract suppliers can be added at any time if necessary.  Contract suppliers must furnish the item to any beneficiary in the area that comes to them regardless of where they live, and the supplier must accept the Medicare payment as payment in full (mandatory assignment).

19. Beneficiary Protections  A physician authorization process ensures that the beneficiary will receive a particular brand product or mode of delivery if their physician determines that it is needed to avoid an adverse medical outcome.  Contract suppliers must furnish the same range of products to Medicare beneficiaries that they furnish to other customers and must report on the products they furnish on a quarterly basis.

20. When will Competitive Bidding Affect People with Medicare?  Medicare will begin the supplier bidding process soon, but there will be no immediate impact on Medicare beneficiaries.  People with Medicare can continue to get their Medicare-covered equipment and supplies from any Medicare-approved supplier until the program begins again in 2011.  Medicare is planning an intense beneficiary and referral agent education campaign in 2010.

21. Questions?  1-800-MEDICARE (1-800-633-4227), TTY users should call 1-877-486-2048  www.medicare.gov  www.cms.hhs.gov/DMEPOSCompetitiveBid