CMS officials detail grandfathering

Wednesday, November 10, 2010

BALTIMORE - The clock is ticking for HME providers who did not win contracts in the nine competitive bidding areas (CBAs) to decide whether to become grandfathered suppliers.

These providers have until Nov. 17 to notify beneficiaries and CMS of their decision, officials reminded listeners during an educational call Nov. 8 for non-contract suppliers.

Under the grandfathering exemption, providers may continue to furnish competitively bid products (except mail-order diabetes supplies and enteral nutrients) to Medicare beneficiaries that they're already serving at the time the bidding program begins.

Here are some key things to know about grandfathering:

* The provider must furnish all items in the product category and must offer to grandfather all of its beneficiaries.

* Beneficiaries can choose to stay with the grandfathered supplier or switch to a contract supplier at any point.

* Payment for the competitively bid item is at the fee schedule amount, while payment for competitively bid supplies and accessories is at the single payment amount.

* Grandfathered suppliers must accept assignment on claims.

Grandfathering oxygen

* The 36-month cap on Medicare reimbursement still applies, meaning the provider must continue to provide oxygen and oxygen equipment for the useful lifetime of the equipment (five years) and must continue to service the beneficiary if there is a change in modality.

* Payment for oxygen is at the single payment amount for the duration of the 36 months and all items and accessories are included in that payment.

* If the beneficiary chooses to get new oxygen equipment after month 60, the equipment must be supplied by a contracted supplier and a new 36-month rental period begins.

* If the beneficiary keeps the same equipment, the grandfathered supplier may elect to continue furnishing it and bill for contents.

Transitioning to contract suppliers

* Providers must pick up their equipment, but they can't pick it up before the end of the last month for which they receive payment.

* Pick-up and delivery should take place on the anniversary date of when the item was first rented to the beneficiary.

* Providers must notify beneficiaries 10 business days before the scheduled pickup date and again two business days before the pickup.


* Any Medicare provider can do repairs and furnish replacement parts. If the part is a bid item, it is paid at the single payment amount. The provider must accept assignment.

* For total replacement of an item, only a contract supplier can furnish the item.

For further information, go to; or call the Competitive Bidding Implementation Contractor (CBIC) customer service center at 877-577-5331.