18-24 Month Delay of Rounds 1 & 2 of the Bid Program:

Terminate contracts awarded under Round 1 and restart the contracting process in those areas in 2009

Round 2 contracting process would begin in 2011

CMS can not apply bid rates in non-bid areas until Round 2 is completed

Offset to Pay For Delay:

In January 2009, the product categories included in Round 1 would be reduced by 9.5 percent nationwide

Items that had been subject to the reduction would receive a 2 percent payment increase in 2014, except in any area where a competitive bidding contract is in effect or CMS has otherwise adjusted payment rates

Items that are not in a bid area would receive the full Consumer Price Index (CPI) update in 2010, 2011, 2012 and 2013

In 2014, these items would receive the CPI update plus 2%

Bidding Process Improvements:

Require CMS to notify bidders about paperwork discrepancies and give suppliers the opportunity to correct within a reasonable time frame

Provide CMS the authority to subdivide MSAs with more than 8 million people

Exempt rural areas and MSAs with a population of less than 250,000 from competitive bidding for at least five years

Require that suppliers who bid on diabetic testing supplies offer brands that cover at least 50% of the market by volume (does not apply to Round 1)

Before using its authority to adjust prices in non-bid areas, CMS must issue a regulation and consider how prices set through competitive bidding compare to costs for such items in non-bid areas

Require HHS's Office of Inspector General to verify calculations used to determine the pivotal bid amount and winning bid amounts

Quality Measures:

Require all suppliers to be accredited by October 1, 2009

Ensure that all suppliers, whether they are billing Medicare directly or are a subcontractor to another supplier, be subject to accreditation

Require contracting suppliers to disclose all subcontracting relationships to CMS

Exclude physicians and other practitioners from DMEPOS accreditation requirements until CMS develops provider-specific standards

Allow CMS to waive physician accreditation if the agency determines they are subject other mandatory quality requirements

Establish a separate ombudsman within CMS to handle supplier and beneficiary issues related to the competitive bidding program

Additional Changes:

Exclude complex rehab and related accessories when furnished with such wheelchairs, from competitive bidding

Exclude negative pressure wound therapy from Round 1 and require CMS to evaluate how these items are coded and paid

Exclude Puerto Rico from Round 1 re-bidding (did not receive enough valid bids in original Round 1 for CMS to award any contracts)

Allow physicians and other treating practitioners to supply "off-the-shelf orthotics" to their patients without being awarded competitive bidding contract

Allow hospitals in bidding areas to supply the same DMEPOS items that physicians and other practitioners will be able to supply (those that are considered an integral part of professional services) without being awarded contracts for those items

Ensure that podiatrists and other similar practitioners can prescribe DMEPOS items by using broader definition of physician in Social Security Act

Delay mandated GAO report to coincide with delay to Round 1 and expand scope of report

Provides CMS implementation funding of $120 million