NCB: Want to be a grandfathered supplier? Here's how

Sunday, September 20, 2009

BALTIMORE - CMS officials detailed the responsibilities of grandfathered and contract suppliers during last week's Special Open Door Forum on national competitive bidding.

Officials reminded suppliers that the grandfathering provision applies to oxygen and oxygen equipment; capped-rental DME; and inexpensive, routinely purchased DME provided on a rental basis (walkers). The provision does not apply to enteral nutrients, equipment or supplies.

For oxygen and oxygen equipment, officials explained:

*    Grandfathered suppliers will be paid the "single payment amount"--or competitive bidding rate--for the duration of the 36-month rental period.

*    If a beneficiary switches from a non-contract supplier to a contract supplier prior to the 36th month of rental, the contract supplier will be paid at least 10 monthly payment amounts at the competitive bidding rate, regardless of how many months the previous supplier was paid.

*    If a beneficiary switches from a contract supplier to another contract supplier, however, the new supplier will not be paid a minimum number of monthly payments.

*    Any supplier that furnishes oxygen and oxygen equipment during the 36-month rental period must continue to furnish the equipment for the remainder of the useful lifetime of the equipment (5 years). He can't transfer his obligation to a contract supplier.

Officials also reviewed the responsibilities for traveling beneficiaries. They explained that payment is always based on the permanent residence of the beneficiary. The supplier who's responsible for providing equipment and services, however, depends on whether the equipment is a bid item or not, and where the beneficiary obtains the item. As a guide, they provided the following examples:

*    Nell lives in Charlotte, N.C., a CBA, and travels to Miami, also a CBA. Nell falls and her doctor orders a walker, a bid item. She must obtain the walker from a contract supplier in Miami, but the supplier will be paid the bid rate in Charlotte.

*    Nell travels to Myrtle Beach, S.C., not a CBA, and she needs a walker, a bid item in Charlotte. She may obtain the walker from any enrolled supplier, but the supplier will be paid the bid rate for Charlotte.

*    John lives in Phoenix, not a CBA, and travels to Riverside, Calif., a CBA. He needs a new CPAP mask, a bid item. He must obtain the mask from a contract supplier, but the supplier will be paid the fee schedule amount in Phoenix.

Listeners peppered CMS officials with a half-dozen questions, including:

*    Are the state licensure requirements outlined on the NSC Web site accurate? A listener pointed out that a chart on the NSC Web site states that a DME license is required to provide diabetic supplies in Pennsylvania. When she called state officials to confirm that information, however, they said a license isn't required unless the provider has sales reps in the state. "The licensure chart on the NSC Web site is a guide only," said Cindy Dreher, content and policy lead for the CBIC. "The ultimate authority lies with the specific state. But we will confirm with the NSC to make sure the chart is up to date and accurate."

*    A supplier who's outside a CBA wins a contract to provide equipment and services in a CBA; after winning the contract, can he open a new location or warehouse in the CBA? "What's important to remember is that we award contracts to locations that are listed on Form B of the application, and those locations must be accredited, have surety bonds and meet all the requirements of an active NSC number," Dreher said. "So if you don't have a location listed on Form B, we can't award you a contract for that location. So no, you could not submit a bid with the intent of opening a location should you be awarded the contract. You have to be able to furnish the items to all the beneficiaries in the CBA from your existing locations."

*    What protections are in place for beneficiaries that are orphaned by suppliers that cease operations? "It's the same as it happens today," Dreher said. "We're not going to leave the beneficiary without a supplier. If a supplier goes out of business, then that beneficiary will go to another supplier."

The forum was the third in a series of eight CMS has planned to discuss various aspects of competitive bidding. The next forum, on financial documentation and small supplier considerations, is scheduled for Sept. 22. To participate, dial 800-837-1935 and use the ID 23045166.