DMEPOS Competitive Bidding Information
***Update on OrthoCare Medical Equipment***
OrthoCare Medical Equipment is pleased to announce our award of many of the 2021 Competitive Bid Supplier Contracts governed by the Centers for Medicare and Medicaid Services (CMS). OrthoCare is a leading, low-cost supplier of Durable Medical Equipment (DME) and Orthotics and as a CMS Contracted Supplier, we will continue to provide all knee and back orthoses without interruption to our patients and for our partner healthcare providers. We look forward to working with you and your team on delivering the best DME services and solutions for you and your patients.
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 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. 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 single payment amount.
Frequently Asked Questions
- What is the purpose of establishing a competitive bid program (CBP)?
The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 and has been an essential tool to Medicare to set more reasonable payment rates for DMEPOS items, save money for beneficiaries and taxpayers, and limit fraud and abuse in the Medicare Program while ensuring access to quality items.
A CBA is an area where only Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program contract suppliers may furnish competitively bid lead and non-lead items to beneficiaries unless an exception is permitted by regulations.
- When will this take effect?
Round 2021 of the program has been announced by the Centers for Medicare & Medicaid Services (CMS) and is scheduled to begin on January 1, 2021.
- How do I know if a Medicare Beneficiary resides in a CBA area?
The following link will provide Zip code-specific details on CBA’s for OTS Knee Braces and OTS Back Braces:
- What Products are included in the Round 2021 CBP?
On October 27, 2020, the Centers for Medicare & Medicaid Services (CMS) announced the single payment amounts and began offering contracts for the off-the-shelf (OTS) back braces and OTS knee braces product categories. All other product categories were removed from Round 2021.
The product categories and their corresponding lead item (highlighted in yellow) Healthcare Common Procedure Coding System (HCPCS) codes are listed in this link here:
- How do you determine the single payment amount for the OTS Knee Brace and OTS Back brace for each CBA?
Below you will find the single payment amounts (SPAs) for the Healthcare Common Procedure Coding System (HCPCS) codes included in Round 2021 of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. Existing payment amounts will be replaced with these SPAs for the selected HCPCS codes in certain competitive bidding areas (CBAs) when Round 2021 is implemented on January 1, 2021.
- How do I know who is a Contracted DMEPOS supplier?
The link below will show those suppliers offered a contract to supply the OTS Knee Brace and OTS Back Brace per each CBA.
- Is anyone exempt from the requirement to be a contracted supplier of competitive bid items?
A non-contract supplier is a supplier that is not awarded a contract by the Centers for Medicare & Medicaid Services (CMS) to furnish items included in the CBP.
Non-contract suppliers that furnish competitively bid items in a competitive bidding area (CBA) are not eligible for Medicare Part B payment for the competitively bid items for that CBA unless one or more of the exceptions listed below applies.
Physicians and Treating Practitioners: Physicians and treating practitioners (physician assistants, nurse practitioners, and clinical nurse specialists) do not need a competitive bidding contract to receive payment for medically necessary competitively bid off-the-shelf orthotics furnished to their own patients as part of their professional services. Furthermore, a physical or occupational therapist in private practice may furnish competitively bid off-the-shelf back and knee braces without submitting a bid and being awarded a contract, provided that the items are furnished only to the therapist’s own patients as part of the physical or occupational therapy service.
Hospitals: Hospitals do not need a competitive bidding contract to receive payment for medically necessary competitively bid off-the-shelf orthotics furnished to their own patients during admission or on the date of discharge. A hospital under this exception does not include a hospital-owned Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) supplier.
Primary Insurance Supplier: Medicare may make a secondary payment for an item furnished by a non-contract supplier that the beneficiary is required to use under his or her primary insurance policy. This policy does not supersede any Medicare secondary payer payment laws, regulations, or policies. Payment will be calculated in accordance with Medicare secondary payer requirements.
- Are Physicians and Hospitals subject to competitive bid pricing for OTS Knee and OTS Back Braces?
Yes, Payment to hospitals, physicians, treating practitioners, and therapists will be made based on the SPA for the item for the CBA where the beneficiary resides.
- Are Medicare Beneficiaries Liable for services received from a Non-Contract supplier?
No, except where an exception applies, a beneficiary has no financial liability to a non-contract supplier that furnishes an item included in the CBP (i.e., a competitively bid OTS back or knee brace) for a CBA, unless the beneficiary has signed an advance beneficiary notice (ABN) that indicates that Medicare will not pay for the item because the beneficiary is receiving it from a non-contract supplier and the beneficiary agrees to accept financial liability
- Can the Contract Supplier provide any product or is it brand specific?
If a physician or treating practitioner prescribes a particular brand or mode of delivery for a beneficiary to avoid an adverse medical outcome, the contract supplier must, as a term of its contract, ensure that the beneficiary receives the needed item(s). The contract supplier has three options:
The contract supplier can furnish the specific brand or mode of delivery as prescribed.
The contract supplier can consult with the physician or treating practitioner to find another appropriate brand of item or mode of delivery for the beneficiary and obtain a revised written prescription.
The contract supplier can assist the beneficiary with locating a contract supplier that will furnish the particular brand of item or mode of delivery prescribed by the physician or treating practitioner.
If the contract supplier does not ordinarily furnish the specific brand or mode of delivery and cannot obtain a revised prescription or locate another contract supplier that will furnish the needed item, the contract supplier MUST furnish the item as prescribed.
It is important to know that any change in a prescription requires a revised written prescription. A contract supplier is prohibited from submitting a claim to Medicare if it furnishes an item different than what is specified in the written prescription received from the beneficiary’s physician or treating practitioner. Medicare will pay the single payment amount for covered competitively bid items in the product category furnished through the Physician Authorization Process.
- Can a Medicare Beneficiary receive product while they are away from their home residence?
Yes, Three important CBP rules to know when a beneficiary needs an OTS back or knee brace while traveling are:
Medicare payment is always based on the beneficiary’s permanent residence.
Which supplier may furnish the OTS back or knee brace is determined based on where the beneficiary purchases the item.
The supplier that provides the OTS back or knee brace to the Medicare beneficiary must accept assignment (i.e., accept Medicare payment as payment in full) unless the beneficiary’s permanent residence is not in a CBA and the beneficiary travels to an area that is not a CBA.
- What information does a referral agent need to know before prescribing a DMEPOS item for a Medicare beneficiary or referring the beneficiary to a DMEPOS supplier?
To direct a beneficiary appropriately, a referral agent first needs to determine if the Medicare beneficiary has Original Medicare or is enrolled in a Medicare Advantage Plan. If the beneficiary is enrolled in a Medicare Advantage Plan, he or she needs to use suppliers approved by that plan
If the beneficiary has Original Medicare, then the referral agent needs to determine if the beneficiary resides in a CBA or is visiting a CBA in which he or she needs to obtain a competitively bid item.
If the beneficiary resides in a CBA and is prescribed an OTS back or knee brace, the referral agent would next determine if the item is a competitively bid item.
If the OTS back and knee braces fall into one of the competitive bid product categories, the referral agent should inform the beneficiary of this and assist the beneficiary in obtaining the item from a contract supplier.
- Where can I find a list of the new contract suppliers for Round 2021?
You can find Round 2021 contract suppliers using the Supplier Directory, which is available to beneficiaries at https://www.medicare.gov/Supplier.
- What are the obligations of a contracted supplier?
Contract suppliers must comply with all terms of their contracts for the full duration of the contract period.
Contract suppliers, including all enrolled contract supplier locations (identified by a Provider Transaction Access Number (PTAN)), must comply with the Medicare enrollment requirements throughout the duration of the contract period. The requirements include (but are not limited to) maintaining Medicare billing privileges and complying with state licensing and accreditation requirements. Only properly enrolled supplier locations that are included on the supplier’s contract will be eligible to furnish competitively bid items and be reimbursed by Medicare.
Medicare payment for competitively bid items is made on an assignment-related basis. Contract suppliers must accept assignment on all items under their contracts. Medicare payment for items under the contract will be based on the item’s single payment amount.
Contract suppliers are responsible for completing the intake and assessment process, submitting claims on behalf of the beneficiary, coordination of care with the physician, delivering DMEPOS items, and, as applicable, setting up the equipment and providing training/instruction to the beneficiary and/or caregiver(s). Contract suppliers are accountable for ensuring that all of the services associated with furnishing the item, including subcontracted services, are performed in compliance with the physician’s order and Medicare rules and guidelines.
Contract suppliers cannot discriminate against Medicare beneficiaries. The items a contract supplier makes available to Medicare beneficiaries under its competitive bidding contract must be the same items furnished to other customers. A contract supplier must furnish all competitively bid items under its contract to any beneficiary who maintains a permanent residence in or visits a CBA and requests the competitive bidding item(s) from the contract supplier.
- Can a Contractor Supplier use a Sub Contractor?
Consistent with the Medicare DMEPOS Supplier Standards, competitive bidding contract suppliers may use a subcontractor to perform the following services:
Purchase of inventory: Fills orders, fabricates, or fits items from its own inventory or by contracting with other companies for the purchase of items necessary to fill the order. If it does, it must provide, upon request, copies of contracts, or other documentation showing compliance with this standard. A supplier may not contract with any entity that is currently excluded from the Medicare program, from any state health care programs, or from any other federal government executive branch procurement or non-procurement program or activity. A subcontractor that performs only this service does not need to be accredited.
Delivery and instruction on the use of Medicare-covered items: Must be responsible for the delivery of Medicare-covered items to beneficiaries and maintain proof of delivery. (The supplier must document that it or another qualified party has, at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively). A subcontractor that only delivers the item does not need to be accredited. If the subcontractor provides more than the delivery by setting up the equipment or giving instructions on the use of the item, then the subcontractor needs to be accredited, unless a professional exemption or the pharmacy exemption applies.
Maintenance and repair of rented equipment: Must maintain and replace at no charge or repair directly, or through a service contract with another company, Medicare-covered items it has rented to beneficiaries. The item must function as required and intended after being repaired or replaced. A subcontractor that only repairs equipment that a supplier is renting to a beneficiary does not need to be accredited. If the subcontractor provides more than the repair of the equipment by setting up the repaired item or giving instructions on the use of the repaired item, then the subcontractor needs to be accredited, unless a professional exemption or the pharmacy exemption applies.
- Does a Subcontractor need to have an accreditation?
A subcontractor that only delivers the item does not need to be accredited. If the subcontractor provides more than the delivery by setting up the equipment or giving instructions on the use of the item, then the subcontractor needs to be accredited, unless a professional exemption or the pharmacy exemption applies.
Contract suppliers and their subcontractors must also possess the applicable state licenses to furnish the items in the competitive bidding area.
Services such as intake and assessment coordination of care with the physician, submitting claims on behalf of the beneficiary, ownership, and responsibility for equipment furnished to the beneficiary, ensuring product safety, etc., are all services that cannot be subcontracted.
Therefore, only contract suppliers can communicate with referral agents and Medicare beneficiaries to arrange for the furnishing of competitively bid items and services.