Competitive bidding analysis

Sunday, May 13, 2007

Payment for repairs of competitively bid items and who can perform those repairs once the program begins are two important issues addressed under the final rule.

In the proposed rule published last year, CMS stated that it would only pay contract suppliers for repairs of competitively bid items. This proposal would have required contract suppliers to service every brand or model of equipment, even though they might not typically service those products. In response to public comments, CMS modified the proposed rule to allow non-contract suppliers to perform and get paid for repairs of competitively bid items.

Specifically, CMS will pay for maintenance and repair of competitively bid items, including any replacement parts necessary, that are performed by any supplier, as long as suppliers who have a valid Medicare billing number make those repairs.

In other words, the supplier performing the repair must be enrolled as a supplier with the program and be eligible to receive payment for Medicare covered services. However, the supplier does not also have to be a winning bidder. Generally, CMS will pay for parts and labor under the current Medicare payment policies for repairs.

One exception: If the part needed to repair the item is itself a competitively bid item, reimbursement will be limited to the single payment amount determined by competitive bidding. CMS reasons that a non-contract supplier should not receive a different price merely because the item was furnished as part of a repair.

For example, CMS notes that, if the beneficiary needs a battery for his or her wheelchair and the battery is itself a competitively bid item, CMS will pay the supplier who performs the repair the reasonable and necessary charges for the labor needed to service the wheelchair and the single payment amount for the battery, even though the battery is an item subject to competitive bidding.

CMS believes that this policy will preserve access for Medicare beneficiaries by permitting contract and non-contract suppliers to complete repairs appropriately.

Healthcare attorney Asela Cuervo is based in Washington, D.C.