July 1 - Medicare's DMEPOS Competitive Bidding Program - Are You Ready?

On July 1, 2008, Medicare will be launching its DMEPOS Competitive Bidding Program. For those of us keeping track of the infinitely growing list of healthcare acronyms, DMEPOS stands for: Durable Medical Equipment, Prosthetics, Orthotics, and Supplies.

The program was originally part of the Medicare Modernization Act of 2003 (MMA), created with the purpose of using free market strategies to drive down costs to Medicare beneficiaries. Basically, Medicare is having DME suppliers submit bids on equipment prices. Medicare then chose the suppliers with the lowest bids to build a contracted network. Because Medicare beneficiaries pay 20% for DME under the Medicare Part B plan, they could possibly realize a substantial savings out of pocket; obviously, Medicare will be paying less to cover the equipment as well. This new system will begin to replace the standard DME fee for goods. The catch (there's always a catch) is that patients will only be able to go to contracted suppliers, if the patients go out of the contracted network, Medicare will not cover any of the costs.

The program will start with 10 Metropolitan Statistical Areas (MSAs), which includes Dallas-Fort Worth, as test markets for the program. The program will be rolled out in these 10 areas on July 1, 2008 then expanded to include an additional 70 MSAs in 2009.

What does this mean to the provider? Well, not much, if you inform your Medicare patients of the program and avoid potential headaches associated with going to out-of-network suppliers. This can be easily accomplished by following a few steps:

1. Determine if the patient lives in or will be obtaining DME within a CBA (Competitive Bidding Area). You can see the list of zip codes included in the CBA here.
2. Determine if the prescribed DME falls into one of the competitive bidding program categories (if it does not, then the patient can go anywhere). You can view the list of categories here.
3. Inform the patient that the equipment will need to be obtained from a certain group of suppliers. You (or the patient) can easily search for contracted providers here by county, city, or zip code. Patients can also find out if their routine supplier is contracted by running a name search.

Not every supplier in the area will be contracted. In fact, for some equipment, less than 35% of the suppliers in a given area will be contracted. This might be unsettling to some patients, and we can't ignore the slight implications on access to care, but the program's goal is to save money for the patient (and CMS).

You can find more information on the Medicare DMEPOS Program at the links below. As always, feel free to contact me with any questions, my information can be found on the Dallas County Medical Society website.

Read: DMEPOS Homepage & Overview
Read: DMEPOS Power Point Presentation
Read: DMEPOS Tip Sheet for Providers