CMS reveals additional competitive bidding details

Sunday, April 6, 2008

WASHINGTON - CMS released two Medicare Learning Network (MLN) Matters articles on national competitive bidding last week. The first gives providers an overview of the program; the second gives them additional details on grandfathering, repair and replacement, mail-order diabetic supplies and advanced beneficiary notices (ABNs).

Here's an overview of the second article:

Grandfathering: Beneficiaries who are receiving rented DME or oxygen at the item the program becomes effective may elect to continue to receive these items from a non-contract supplier, if the supper is willing to continue furnishing these items. If the non-contract supplier is not willing to continue furnishing these items or the beneficiary wants to change to a contract supplier, the non-contract supplier must pick up the rental equipment. Unless a beneficiary relocates outside of a CBA, the supplier can't discontinue services by picking up an item prior to the end of a rental month for which the supplier was eligible to receive a rental payment, even if the last day of a rental month is after the start date of the program. If the date of the beginning of a monthly rental period is prior to the start of the competitive bidding program, the supplier must submit a claim for that month.

Repair: A beneficiary who owns a competitively bid item that needs to be repaired may have the repairs performed by either a contract or non-contract suppliers. In these cases, Medicare pays for reasonable and necessary labor not otherwise covered under a manufacturer's or supplier's warranty.

Repair and Replacement: If a part needs to be replaced in order to make the beneficiary-owned equipment serviceable, and the replacement part is also a competitively bid item for the CBA in which the beneficiary maintains a permanent residence, the part may be obtained from either a contract supplier or a non-contract supplier. In either case, Medicare pays the single payment amount provided under the program for the replacement part.

Replacement: Beneficiaries maintaining permanent residences in a CBA are required to obtain replacement of all items subject to competitive bidding from a contract supplier. This includes replacement of base equipment and replacement of parts or accessories for base equipment that are being replaced for reasons other than servicing of the base equipment. Beneficiaries who are not permanent residents of a CBA but require a replacement of a competitively bid item while visiting a CBA, must obtain the replacement item from a contract supplier. The supplier will be paid the fee schedule amount.

Mail-order diabetic supplies: Beneficiaries who permanently reside in a CBA may purchase their diabetic testing supplies from a mail order contract supplier for the area in which the beneficiary maintains a permanent residence; or a non-contract supplier in cases where the supplies are not furnished on a mail order basis. Mail order contract suppliers will be reimbursed at the single payment amount for the CBA where the beneficiary maintains a permanent residence. For diabetic supplies that are not furnished through mail order, suppliers will be paid the fee schedule amount. Medicare payment will not be made to non-contract suppliers that furnish mail order diabetic testing supplies to Medicare beneficiaries residing in a CBA. A special KL modifier will be used on each claim to indicate that the item was furnished on a mail order basis. All mail order contract suppliers are required to report the manufacturer or make and model number of products they furnish and must update this list on a quarterly basis. This information will be made available to the public once the contract suppliers have been announced and will be updated on a routine basis. Contract suppliers will be required to make available the same range of products to Medicare beneficiaries that they make available to non-Medicare customers.

ABNs: In general, if a non-contract supplier in a CBA furnishes a competitively bid item to any Medicare beneficiary regardless of whether that beneficiary maintains a permanent residence in the CBA or another area, and no applicable exceptions apply, Medicare will not make payment. In addition, the beneficiary is not liable for payment unless the non-contract supplier in a CBA obtains an ABN signed by the beneficiary. If a non-contract supplier furnishes a competitively bid item to a beneficiary and the beneficiary signs an ABN, the supplier must use the "GA" modifier on their claim.