The DMEPOS Competitive
Bidding Program was mandated by Congress through the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA).The statute requires that
Medicare replace the current fee schedule payment methodology for
selected Durable Medical Equipment, Prosthetics, Orthotics and Supplies
(DMEPOS) items with a competitive bid process. The intent is to improve the
effectiveness of the Medicare methodology for setting DMEPOS payment amounts,
which will reduce beneficiary out-of-pocket expenses and save the Medicare
program money while ensuring beneficiary access to quality items and
services.
Under the program, a
competition among suppliers who operate in a particular Competitive Bidding Area
(CBA) is conducted. Suppliers are required to submit a bid for selected
products. Not all products or items are subject to competitive bidding. Bids are
submitted electronically through a web-based application process and required
documents are mailed. Bids are evaluated based on the supplier’s eligibility,
its financial stability and the bid price. Contracts are awarded to the Medicare
suppliers who offer the best price and meet applicable quality and financial
standards. Contract suppliers must agree to accept assignment on all claims for
bid items and will be paid the bid price amount. The amount is derived from the
median of all winning bids for an item.
The Centers for Medicare & Medicaid Services (CMS) has contracted
with Palmetto GBA to administer the DMEPOS Competitive Bidding Program. Palmetto
GBA is responsible for conducting certain functions including performing bid
evaluations, selecting qualified suppliers, setting payments for all competitive
bidding areas and overseeing an education program. Palmetto GBA also assists CMS
and its contractors in monitoring the program’s effectiveness, access, and
quality.
You may find additional information in the Competitive Bidding Final Rule.
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