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Fast Facts

DMEPOS competitive bidding process will begin April 2007.
CMS has announced the 10 MSAs where competitive bidding will be introduced.
CMS has announced the product categories included in the first competitive bidding project.
The Final Rule governing competitive bidding ensures that at least 30 percent of bid winners are small businesses.
Suppliers must obtain accreditation to participate in competitive bidding. The ONLY exception to the rule is a pharmacy that maintains a Part B supplier billing number to submit Part B drug claims and administer vaccinations.
Ten agencies have been approved to accredit suppliers of DMEPOS.

Important Links:

Final Competitive Bidding DMEPOS Rule Affects Small Supplier Networks

By William Popomaronis, R.Ph.

The small supplier networks extensively defined in CMS's proposed rule 1270-P have been dramatically changed in the final rule.

As originally proposed, a network must conform to CMS's "Opportunity for Network Guidelines" detailed in pages 113-118 of 1270P.

Key network requirements included:

Separate legal entity must be created
The legal entity is responsible for billing and collections
Executed performance agreements with suppliers (subcontractors) required
Each subcontractor must be accredited and can only join one network
Subcontractors can’t bid independently, if bidding through a network
The network can't be anticompetitive (defined as having greater than 20 percent market share)

In the final rule, published in the April 10 edition of the Federal Register, CMS limited provider networks for the purposes of competitive bidding to 20 members, each of whom can have no more than $3.5 million in gross revenues -- total business sales including DMEPOS.

The proposed rule, unlike the final rule, did not include a limit on the number of providers in a network. It also required networks to centralize their billing, a provision also not found anywhere in the final rule. Centralized billing and collection functions were a huge incentive to join a network.

Additionally, the final rule states that each member of the network must submit a statement attesting that it joined the network because it cannot furnish all of the items in a product category to beneficiaries throughout the competitive bidding area. You just can’t join because you are unsure of what to bid.

It is likely that with the inclusion of the 30 percent small supplier target provision for winning bidders that CMS wished to deemphasize the formation of networks.

William Popomaronis, R.Ph., is vice president, long term and home health care services for the National Community Pharmacists Association (NCPA). He is also the only pharmacist member of Medicare’s Program Advisory and Oversight Committee (PAOC), which provides advice on the development and implementation of the DME Competitive Acquisition Program.

Bayer HealthCare, Diabetes Care, has underwritten the costs of this communication. The information expressed in this communication are the views of NCPA. Bayer is not responsible for the accuracy of the information expressed in this communication. Any questions related to DME Accreditation and/or Competitive Bidding for DMEPOS should be directed to the Centers for Medicare and Medicaid Services or NCPA.


	Sponsored by Fast Facts DMEPOS competitive bidding process will begin April 2007. CMS has announced the 10 MSAs where competitive bidding will be introduced. CMS has announced the product categories included in the first competitive bidding project. The Final Rule governing competitive bidding ensures that at least 30 percent of bid winners are small businesses. Suppliers must obtain accreditation to participate in competitive bidding. The ONLY exception to the rule is a pharmacy that maintains a Part B supplier billing number to submit Part B drug claims and administer vaccinations. Ten agencies have been approved to accredit suppliers of DMEPOS. Important Links: Medicare DME Home Page Medicare DME blog Medicare DMe-Alert Archive Final Competitive Bidding DMEPOS Rule Affects Small Supplier Networks By William Popomaronis, R.Ph. The small supplier networks extensively defined in CMS's proposed rule 1270-P have been dramatically changed in the final rule. As originally proposed, a network must conform to CMS's "Opportunity for Network Guidelines" detailed in pages 113-118 of 1270P. Key network requirements included: Separate legal entity must be created The legal entity is responsible for billing and collections Executed performance agreements with suppliers (subcontractors) required Each subcontractor must be accredited and can only join one network Subcontractors can’t bid independently, if bidding through a network The network can't be anticompetitive (defined as having greater than 20 percent market share) In the final rule, published in the April 10 edition of the Federal Register, CMS limited provider networks for the purposes of competitive bidding to 20 members, each of whom can have no more than $3.5 million in gross revenues -- total business sales including DMEPOS. The proposed rule, unlike the final rule, did not include a limit on the number of providers in a network. It also required networks to centralize their billing, a provision also not found anywhere in the final rule. Centralized billing and collection functions were a huge incentive to join a network. Additionally, the final rule states that each member of the network must submit a statement attesting that it joined the network because it cannot furnish all of the items in a product category to beneficiaries throughout the competitive bidding area. You just can’t join because you are unsure of what to bid. It is likely that with the inclusion of the 30 percent small supplier target provision for winning bidders that CMS wished to deemphasize the formation of networks.

	William Popomaronis, R.Ph., is vice president, long term and home health care services for the National Community Pharmacists Association (NCPA). He is also the only pharmacist member of Medicare’s Program Advisory and Oversight Committee (PAOC), which provides advice on the development and implementation of the DME Competitive Acquisition Program.

	Bayer HealthCare, Diabetes Care, has underwritten the costs of this communication. The information expressed in this communication are the views of NCPA. Bayer is not responsible for the accuracy of the information expressed in this communication. Any questions related to DME Accreditation and/or Competitive Bidding for DMEPOS should be directed to the Centers for Medicare and Medicaid Services or NCPA.