HME Industry News

Metropolitan Statistical Areas for Second Round of Competitive Bidding

The second round of bidding will occur in the following 70 Metropolitan Statistical Areas (MSAs):

West
Albuquerque, NM
Bakersfield, CA
Colorado Springs, CO
Denver-Aurora, CO
Fresno, CA
Las Vegas-Paradise, NV
Los Angeles-Long Beach-Santa Ana, CA
Sacramento--Arden-Arcade--Roseville, CA
Salt Lake City, UT
San Diego-Carlsbad-San Marcos, CA
San Francisco-Oakland-Fremont, CA
San Jose-Sunnyvale-Santa Clara, CA

Midwest
Akron, OH
Chicago-Naperville-Joliet, IL-IN-WI
Columbus, OH
Dayton, OH
Detroit-Warren-Livonia, MI
Flint, MI
Grand Rapids-Wyoming, MI
Huntington-Ashland, WV-KY-OH
Indianapolis-Carmel, IN
Milwaukee-Waukesha-West Allis, WI
Minneapolis-St. Paul-Bloomington, MN-WI
Omaha-Council Bluffs, NE-IA
Toledo, OH
Wichita, KS
Youngstown-Warren-Boardman, OH-PA

South
Asheville, NC
Atlanta-Sandy Springs-Marietta, GA
Augusta-Richmond County, GA-SC
Austin-Round Rock, TX
Baton Rouge, LA
Beaumont-Port Arthur, TX
Birmingham-Hoover, AL
Cape Coral-Fort Myers, FL
Charleston-North Charleston, SC
Chattanooga, TN-GA
Columbia, SC
Deltona-Daytona Beach-Ormond Beach, FL
El Paso, TX
Greensboro-High Point, NC
Greenville-Mauldin-Easley, SC
Houston-Sugar Land-Baytown, TX
Jackson, MS
Jacksonville, FL
Knoxville, TN
Lakeland, FL
Little Rock-North Little Rock-Conway, AR
Louisville/Jefferson County, KY-IN
McAllen-Edinburg-Mission, TX
Memphis, TN-MS-AR
Nashville-Davidson--Murfreesboro--Franklin, TN
New Orleans-Metairie-Kenner, LA
Ocala, FL
Oklahoma City, OK
Palm Bay-Melbourne-Titusville, FL
Raleigh-Cary, NC
Richmond, VA
San Antonio, TX
Tampa-St. Petersburg-Clearwater, FL
Tulsa, OK
Virginia Beach-Norfolk-Newport News, VA-NC

Northeast
Allentown-Bethlehem-Easton, PA-NJ
Bridgeport-Stamford-Norwalk, CT
Hartford-West Hartford-East Hartford, CT
New Haven-Milford, CT
New York-Northern New Jersey-Long Island, NY-NJ-PA
Scranton--Wilkes-Barre, PA
Syracuse, NY

The program will be expanded into additional areas after 2009.

CMS plans to announce the competitive bidding areas (CBAs) specific zip codes by MSAs in which competitive bidding will be conducted in the next few months.

A competitive bidding area (CBA) is defined by specific zip codes by MSA. The CBA may be concurrent with, larger than or smaller than the related MSA depending on a variety of considerations including the exclusion of low population-density areas within the MSA and the inclusion of a part of a normal service area. The CBA will be the area wherein contract suppliers will furnish certain DMEPOS items to resident beneficiaries.


Affected Product Categories

The second round of the Medicare DMEPOS Competitive Bidding program will include 8 of the top DMEPOS product categories. These product categories were selected based on criteria outlined in the regulation. The following are the product categories for round two:

1 - Oxygen Supplies and Equipment

2 - Standard Power Wheelchairs, Scooters, and Related Accessories

3 - Complex Rehabilitative Power Wheelchairs and Related Accessories

4 - Enteral Nutrients, Equipment, and Supplies

5 - Continuous Positive Airway Pressure (CPAP) Devices, Respiratory Assist Devices (RADs), and Related Supplies and Accessories

6 - Hospital Beds and Related Accessories

7 - Negative Pressure Wound Therapy (NPWT) Pumps and Related Supplies and Accessories

8 - Walkers and Related Accessories

First Ten MSAs
The initial 10 MSAs involved in Competitive Bidding are:

• Charlotte-Gastonia-Concord; NC-SC
• Cincinnati-Middletown, OH-KY-IN
• Cleveland-Elyria-Mentor, OH
• Dallas-Fort Worth-Arlington, TX
• Kansas City, MO-KS
• Miami-Fort Lauderdale-Miami Beach, FL
• Riverside-San Bernardino-Ontario, CA
• Orlando-Kissimmee, FL
• Pittsburgh, PA
• San Juan-Caguas-Guaynabo, PR

Ten Product Categories
The 10 product categories that will be subject to competitive bidding are:

• Oxygen supplies and equipment;
• Standard power wheelchairs, scooters, and related accessories;
• Complex rehabilitative power wheelchairs and related accessories;
• Mail-order diabetic supplies;
• Enteral nutrients, equipment, and supplies;
• Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories;
• Hospital beds and related accessories;
• Negative pressure wound therapy (NPWT) pumps and related supplies and accessories;
• Walkers and related accessories; and
• Support surfaces (Group 2 mattresses and overlays – Miami and San Juan only)

Timeline
May 15, 2007 through September 25, 2007 (9PM EST) – Bidding period.
October 31, 2007 - Providers MUST by fully accredited to be considered for a winning bid spot.
Through Winter 2007 – CMS and its contractors review bids.
Early 2008 – Announcement of winning bids.
July 1, 2008 – Implementation of begins.

The new competitive bidding program will replace the current payment amounts, for the items being bid, under Medicare’s DMEPOS fee schedule with payment rates derived from the bidding process. Providers that wish to furnish competitively bid items in a CBA will be required to submit bids to provide those items. CMS says contracts will be awarded to a sufficient number of winning bidders in each CBA to ensure access and service to high quality DMEPOS items. The winning bids will be used to establish a single Medicare payment amount for each item.

Accreditation
The rule requires all contracting suppliers to be accredited by an approved accreditation organization as meeting CMS’ quality standards. CMS has designated 10 entities as qualified to accredit HME providers, based on quality standards that were posted on the CMS website in August 2006. The single payment amounts established through competitive bidding will be lower than the current fee schedule amounts for the items. In addition, contract providers must accept the single payment amount established through competitive bidding as payment in full. The beneficiary’s liability is limited to 20 percent of the payment amount and any unmet Part B deductible.

Exceptions
CMS is creating a limited exception to the competitive bidding requirement that will allow certain treating professionals to furnish items on the competitive bidding list to their own patients without having to participate in bidding and without becoming a contract supplier. This exception would apply to certain specified items furnished by physicians, physician assistants, clinical nurse specialists, nurse practitioners, occupational therapists in private practice, and physical therapists in private practice.

Grandfathering
The rule also adopts some special protections for beneficiaries in the CBAs who are already renting certain DMEPOS items when the program becomes effective. For example, the final rule includes a grandfathering provision that may enable these beneficiaries to continue renting these items from their existing suppliers if the supplier chooses to continue renting the item under grandfathering rule (called “noncontract suppliers”), rather than having to switch to a contract supplier. If the beneficiary continues to need the item that they are renting from a non-contract supplier and switches to a contract supplier, access to items and services will be ensured because the contract supplier that assumes responsibility for serving the beneficiary will be able to take advantage of special payment provisions.

Oxygen Therapy
For providers of oxygen equipment, the final rule provides for a minimum of 10 months of payment to a contract provider who assumes the responsibility for providing oxygen to a beneficiary who had been receiving services from a non-contract provider. Similarly, if a beneficiary who is renting capped rental equipment switches from a noncontract provider to one that has been awarded a contract under the competitive bidding program, the new contract provider will receive 13 months of rental payments. These payment provisions apply without regard to the number of months of payments Medicare previously made to the noncontract supplier; however, payment can only be made if medical necessity for the equipment continues.

The final rule allows beneficiaries who own an item of DMEPOS that is part of the competitive bidding program to obtain maintenance and servicing from any Medicare provider that has a valid billing number, and is not limited to seeking repairs from contract suppliers. However, if the standards for obtaining a total replacement of an owned item that is part of the competitive bidding program are met, the beneficiary will have to obtain the replacement item from a contract supplier, and payment will be made for the item at the single payment amount.

Small Provider Provisions
The final rule includes a 30 percent target number for small provider participation, defined as those providers having gross revenue of $3.5 million or less in annual receipts.  If CMS determines after the initial evaluation of bids that there are not enough small providers with winning bids to meet the target goal of 30 percent in each product category, then contracts will be offered to small suppliers that submitted bids higher than but close to the winning bids. The small providers will have the option to accept the single payment amounts based on the winning bids until the 30 percent goal is met or there are no additional small providers.

The final rule also allows small providers to form networks in order to participate in the bidding process, provided that these networks comply with all federal and state laws including the federal antitrust laws. In addition, small providers will not be required to submit bids for all product categories.

Criteria for Participation
In order to qualify for a contract under the competitive bidding program, a homecare provider must generally meet certain criteria, including:

• Be in good standing with the Medicare program and not under any current sanctions by Medicare or any governmental agency or accreditation or licensing organization.
   
• Have an active National Supplier Clearinghouse (NSC) number.
   
• Meet any local or state licensure requirements for the item being bid;
   
• Submit a bid as a prerequisite to becoming a winning supplier.
   
• Be accredited or have an application for accreditation pending in order to participate in bidding.
   
• Provide capacity estimates of the number of units for each item included in the product category that the supplier would be capable of furnishing under the program.
   
• Agree to service the entire CBA regardless of where the beneficiary is located, although the supplier will not be required to be capable of servicing 100 percent of the beneficiaries in that geographic area.

If a provider has multiple locations in a competitive bidding area, then it must submit a single bid for all of its locations and if the provider is selected as a contract supplier, than all of its locations within the CBA would be considered to be contract suppliers. This will help ensure geographic distribution of suppliers.

Additional information on the DMEPOS competitive bidding program, including the CBAs and competitive bidding items for the first round of competitive bidding, is available at the following web site:

http://www.dmecompetitivebid.com

CMS ANNOUNCES DEEMED ACCREDITATION ORGANIZATIONS FOR SUPPLIERS OF DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS AND SUPPLIES

The Centers for Medicare & Medicaid Services (CMS) today (11/22/06) announced the names of eleven national accreditation organizations that will accredit suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) as meeting new quality standards under Medicare Part B.

DMEPOS suppliers will have to meet new quality standards in order to be able to bill the Medicare Part B program for durable medical equipment, prosthetics, orthotics, or prosthetic devices, such as walkers, wheelchairs, and hospital beds, furnished to Medicare beneficiaries. The requirement that CMS-approved accreditation organizations apply quality standards to DMEPOS suppliers was enacted as part of the Medicare Modernization Act of 2003.  The Medicare Modernization Act also requires CMS to implement competitive bidding for certain items of DMEPOS.

CMS hopes to minimize the burden on suppliers by having the accreditation organizations consider during the survey process the previous accreditation, Medicare certification, and licensure that would indicate that the quality standards are being met. In addition, CMS will instruct accrediting organizations to focus first on suppliers in the initial group of Metropolitan Statistical Areas (MSAs) chosen for the competitive bidding program.

The following organizations have been recognized as national accreditation organizations and have been given deeming authority to accredit DMEPOS suppliers seeking to participate in the Medicare program: 

 Accreditation Commission for Healthcare (ACHC)

 Joint Commission on Accreditation of Healthcare Organizations (JCAHO)

 Community Health Accreditation Program (CHAP)

Healthcare Quality Association on Accreditation (HQAA)

The Compliance Team, Inc.

 National Board of Accreditation for Orthotic Suppliers

 Board of Certification in Pedorthics

 Board for Orthotist/Prosthetist Certification

 National Association of Boards of Pharmacy

 Commission on Accreditation of Rehabilitation Facilities

 American Board for Certification in Orthotics and Prosthetics, Inc.

Documentation Requirements for Power Mobility 

Section 1833(e) of the Social Security Act precludes payment to any provider of services unless "there has been furnished such information as may be necessary in order to determine the amounts due such provider." It is expected that the patient's medical records will reflect the need for the care provided. The patient's medical records include the physician's office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals and test reports. This documentation must be available upon request.

ORDERS:

The order that the supplier must receive within 45 days after completion of the face-to-face examination must contain all of the following elements:
1) Beneficiary’s name
2) Description of the item that is ordered. This may be general – e.g., “power operated vehicle”, “power wheelchair”, or “power mobility device”– or may be more specific.
3) Date of the face-to-face examination
4) Pertinent diagnoses/conditions that relate to the need for the POV or power wheelchair
5) Length of need
6) Physician’s signature
7) Date of physician signature

A date stamp or equivalent must be used to document receipt date.

If a written order containing all of these required elements is not received by the supplier within 45 days after completion of the face-to-face examination an EY modifier must be added to the HCPCS codes for the power mobility device and all accessories. The order must be available on request.

Once the supplier has determined the specific power mobility device that is appropriate for the patient based on the physician's order, the supplier must prepare a written document (termed a detailed product description) that lists the specific base (HCPCS code and either a narrative description of the item or the manufacturer name/model) and all options and accessories that will be separately billed. The supplier must list their charge and the Medicare fee schedule allowance for each separately billed item. If there is no fee schedule allowance, the supplier must enter “not applicable”. The physician must sign and date this detailed product description and the supplier must receive it prior to delivery of the PWC or POV. A date stamp or equivalent must be used to document receipt date. The detailed product description must be available on request.

FACE-TO-FACE EXAMINATION:

The report of the face-to-face examination (see Policy Article) should provide information relating to the following questions.

The report should provide pertinent information about the following elements, but may include other details (each element would not have to be addressed in every evaluation):  

• Symptoms
• Related diagnoses
• History
  • How long the condition has been present
  • Clinical progression
  • Interventions that have been tried and the results
  • Past use of walker, manual wheelchair, POV, or power wheelchair and the results
• Physical exam
  • Weight
  • Impairment of strength, range of motion, sensation, or coordination of arms and legs
  • Presence of abnormal tone or deformity of arms, legs, or trunk
  • Neck, trunk, and pelvic posture and flexibility
  • Sitting and standing balance
• Functional assessment – any problems with performing the following activities including the need to use a cane, walker, or the assistance of another person
  • Transferring between a bed, chair, and PMD
  • Walking around their home – to bathroom, kitchen, living room, etc. – provide information on distance walked, speed, and balance

A date stamp or equivalent must be used to document receipt date. The written report of this examination must be available on request.

Physicians shall document the examination in a detailed narrative note in their charts in the format that they use for other entries. The note must clearly indicate that a major reason for the visit was a mobility examination.

Many suppliers / manufacturers have created forms which have not been approved by CMS which they send to physicians and ask them to complete. Even if the physician completes this type of form and puts it in his/her chart, this supplier-generated form is NOT a substitute for the comprehensive medical record as noted above. Suppliers are encouraged to help educate physicians on the type of information that is needed to document a patient’s mobility needs.

Physicians shall also provide reports of pertinent laboratory tests, x-rays, and/or other diagnostic tests (e.g., pulmonary function tests, cardiac stress test, electromyogram, etc.) performed in the course of management of the patient.

If the report of a licensed/certified medical professional (LCMP) examination is to be considered as part of the face-to-face examination (see Policy Article), there must be a signed and dated attestation by the supplier that the LCMP has no financial relationship with the supplier. (Note: Evaluations performed by an LCMP who has a financial relationship with the supplier may be submitted to provide additional clinical information, but will not be considered as part of the face-to-face examination by the physician.)

Although patients who qualify for coverage of a power mobility device may use that device outside the home, because Medicare’s coverage of a wheelchair or POV is determined solely by the patient’s mobility needs within the home, the examination must clearly distinguish the patient’s abilities and needs within the home from any additional needs for use outside the home.

SPECIALTY EVALUATION:

The specialty evaluation that is required for patients who receive a Group 2 Single Power Option or Multiple Power Options PWC, any Group 3 or Group 4 PWC, or a push-rim activated power assist device is in addition to the requirement for the face-to-face examination. The specialty evaluation provides detailed information explaining why each specific option or accessory – i.e., power seating system, alternate drive control interface, or push-rim activated power assist – is needed to address the patient’s mobility limitation. There must be a written report of this evaluation available on request.

HOME ASSESSMENT:

Prior to or at the time of delivery of a POV or PWC, the supplier or practitioner must perform an on-site evaluation of the patient’s home to verify that the patient can adequately maneuver the device that is provided considering physical layout, doorway width, doorway thresholds, and surfaces. There must be a written report of this evaluation available on request.

MISCELLANEOUS:

If the requirements related to a face-to-face examination (see related Policy Article) have not been met, the GY modifier must be added to the codes for the power mobility device and all accessories.

If the power mobility device or push-rim activated power assist device that is provided is only needed for mobility outside the home, the GY modifier must be added to the codes for the item and all accessories.

A KX modifier may be added to the code for a power mobility device and all accessories only if one of the following conditions is met:  

1. If all of the coverage criteria specified in this LCD have been met for the product that is provided; or
2. If there is an affirmative Advance Determination of Medicare Coverage (ADMC) for the product that is provided,: or
3. If a Group 4 PWC is provided and if all of the coverage criteria for a comparable Group 3 PWC have been met.

The following power wheelchairs are eligible for Advance Determination of Medicare Coverage (ADMC):

1. A Group 2, 3, 4 or 5 Single Power Option or Multiple Power Options wheelchair (K0835-K0843, K0856-K0864, K0877-K0891) – whether or not a power seating system will be provided at the time of initial issue.
2. A Group 3 or 4 No Power Option wheelchair (K0848-K0855, K0868-K0871) that will be provided with an alternative drive control interface at the time of initial issue.