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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:

Before Bidding, Know Your ABC

By William Popomaronis, R.Ph.

Activities based costing (ABC) is a costing model that identifies cost pools or activity centers in an organization, and assigns costs to products and services (cost drivers) based on the number of events or transactions involved in the process of providing that particular product or service, in this case DME.

For example, if an automobile manufacturer produces 50 vehicles for a total cost of $1,250,000, then the cost-per-unit (vehicle) is $25,000.

The ABC costing model relates DMEPOS indirect costs on the basis of volume.

Considerations include, but are not limited to:

Identifying the most and least profitable Medicare beneficiaries, DMEPOS products, and distribution channels.
Determining the true contributors to and detractors from financial performance.
Accurately predicting costs, profits, and resource requirements associated with changes in production volumes, organizational structure, and resource costs.
Easily identifying the root causes of poor financial performance.
Tracking cost activities and work processes.
Equiping pharmacy owners or managers with cost intelligence to drive performance.

With the cost based on activities, the cost of serving a Medicare beneficiary can be ascertained individually. By deducting the product cost and the cost to serve each customer, one can arrive at an individual customer's profitability

Know you true costs of providing a particular product and service, and you will be able to bid profitably.

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 Before Bidding, Know Your ABC By William Popomaronis, R.Ph. Activities based costing (ABC) is a costing model that identifies cost pools or activity centers in an organization, and assigns costs to products and services (cost drivers) based on the number of events or transactions involved in the process of providing that particular product or service, in this case DME. For example, if an automobile manufacturer produces 50 vehicles for a total cost of $1,250,000, then the cost-per-unit (vehicle) is $25,000. The ABC costing model relates DMEPOS indirect costs on the basis of volume. Considerations include, but are not limited to: Identifying the most and least profitable Medicare beneficiaries, DMEPOS products, and distribution channels. Determining the true contributors to and detractors from financial performance. Accurately predicting costs, profits, and resource requirements associated with changes in production volumes, organizational structure, and resource costs. Easily identifying the root causes of poor financial performance. Tracking cost activities and work processes. Equiping pharmacy owners or managers with cost intelligence to drive performance. With the cost based on activities, the cost of serving a Medicare beneficiary can be ascertained individually. By deducting the product cost and the cost to serve each customer, one can arrive at an individual customer's profitability Know you true costs of providing a particular product and service, and you will be able to bid profitably.

	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.