- January 2012 Brings Round 2 of CMS' Competitive Bidding Program for Suppliers of Durable Medical Equipment Orthotics And Supplies (DMEPOS)
On November 30, 2011, the Senate Special Committee on Aging held a hearing entitled "Overprescribed: The Human and Taxpayers' Costs of Antipsychotics in Nursing Homes." This hearing was held largely in response to a May 2011 report issued by the Health and Human Services' Office of Inspector General (OIG) that, based on a review of Medicare claims data for 6 months in 2007, concluded "[i]n total, 95 percent (nearly 1.4 million) of Medicare claims for atypical antipsychotic drugs were for elderly nursing home residents diagnosed with off-label conditions and/or the condition specified in … boxed warning[s]."
Following testimony from OIG and CMS, CMA Senior Policy Attorney Toby Edelman testified as a witness on a panel of experts on long-term care issues. In her testimony, Ms. Edelman, among other things: noted that this problem is a long-standing one (this Committee issued a report on the misuse of drugs in nursing homes in 1975 and held a workshop on reducing the use of chemical restraints in nursing homes in 1991); pointed out that the federal Nursing Home Reform Law prohibits the antipsychotic drug practices that we see in too many nursing homes, although the law is not adequately enforced; highlighted some of the reasons antipsychotics are inappropriately prescribed and the high costs of these drugs; and outlined some solutions to this problem. Ms. Edelman's written testimony is available at http://cma.benfredaconsulting.com/2011/12/toby-edelman-testifies-before-senate-special-committee-regarding-antipsychotics-in-nursing-homes/. Also see previous Alerts written on this subject.
 Office of Inspector General, Medicare Atypical Antipsychotic Drug Claims for Elderly Nursing Home Residents, OEI-07-08-00150, pages 14-18 (April 2011), http://www.oig.hhs.gov/oei/reports/oei-07-08-00150.pdf. Also see previous CMA Alert discussing this OIG report: "Real Solutions to Save Medicare Dollars in Skilled Nursing Facilities" (June 30, 2011), available at: http://cma.benfredaconsulting.com/2011/06/real-solutions-to-
 "Reducing Antipsychotic Drug Use in Nursing Homes: Save Residents' Lives, Save Medicare Billions of Dollars" (March 17, 2011) available at:
use-in-nursing-homes-save-residents-lives-save-medicare-billions-of-dollars/; "Off-Label Drug Use is Common and Hurts Nursing Home Residents" (March 25, 2010), available at:
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The Medicare Annual Coordinated Election Period (ACEP) ends in less than 1 week.
During the ACEP, often referred to as "open enrollment," Medicare beneficiaries who do not have a Part D plan can enroll in one, and those who do have Part D coverage can change plans. Beneficiaries can also return to traditional Medicare from a Medicare Advantage (MA) plan, enroll in an MA plan, or change MA plans.
As discussed in previous Alerts, beneficiaries who are satisfied with their plans in 2011 should still review their plan options for 2012, as MA and Part D plans may have made changes to their coverage, provider networks and other plan features.
Most individuals who miss this December 7 deadline will not be able to make MA or Part D plan changes until the Fall of 2012 for the 2013 plan year.
 See "Annual Enrollment Starts October 15 and Ends December 7 for Medicare Part C and Part D Plans" (September 22, 2011), available at:
enrollment-starts-october-15-and-ends-december-7-for-medicare-part-c-part-d-plans/ ; also see "Medicare Advantage and Part D Changes and Enrollment Updates" (October 6, 2011) available at: http://cma.benfredaconsulting.com/2011/10/medicare-advantage-and-part-d-
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The DMEPOS competitive bidding program was created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). MMA requires the Secretary of Health and Human Services (HHS) to establish and implement programs for the competitive bidding of DMEPOS in competitive bidding areas (CBAs) within Metropolitan Statistical Areas (MSAs) throughout the United States. The programs for competitive biding apply to contract awards to furnish certain competitively priced items for which payment is made under Medicare Part B. DMEPOS competitive bidding programs were created in order to hold down prices and to decrease fraud and program abuse.
January 2012 is the start of Round 2 of the competitive bidding program. Round 2 expands the product categories that are subject to competitive bidding and expands the number of competitive bidding areas (CBAs) affected.
It is important that Medicare beneficiaries understand the DMEPOS program and, where applicable, use certified DMEPOS suppliers. Advocates may wish to visit the DMEPOS website (listed below) and consider developing educational tools for their client populations.
Only a contract supplier is allowed to furnish competitively bid items in a CBA unless the supplier comes under an exception as allowed by regulations. MSAs and CBAs comprise the major cities and surrounding areas that are subject to Round 2 of competitive bidding. Further, a beneficiary has no financial liability to a non-contract supplier that furnishes an item included in the competitive bidding program for a CBA (unless the non-contract supplier comes under an exception, such as grandfathered suppliers), unless the beneficiary has signed an advanced beneficiary notice.
The Centers for Medicare & Medicaid Services (CMS) announced Round 2 of the competitive bidding program on August 19, 2011. CMS also announced that it will be conducting a national mail-order competition for diabetic testing supplies, scheduled to commence at the same time as Round 2 of the competitive bidding program. The national mail-order competition will include all parts of the United States, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa.
Round 2 Product Categories for Competitive Bidding
- Oxygen, oxygen equipment and supplies
- Standard wheelchairs (both power and manual), scooters, and related accessories
- Enteral nutrients, equipment, and supplies
- Continuous Positive Airway Pressure (CPAP) devices and Respiratory Assist Devices (RADS) and related supplies and accessories
- Hospital beds and related accessories
- Walkers and related accessories
- Negative Pressure Wound Therapy pumps and related supplies and accessories
- Support surfaces (Group 2 mattresses and overlays)
For a list of the specific items in each product category, visit the Competitive Bidding Implementation Contractor (CBIC) website: www.dmecompetitivebid.com.
Metropolitan Statistical Areas (MSAs) and Competitive Bidding Areas (CBAs) for Round 2
Round 2 CBAs are defined by a specific zip code within an MSA. MSAs and CBAs comprise the major cities and surrounding areas that are subject to Round 2 of competitive bidding. The areas are designated by the Office of Management and Budget (OMB). CBAs are designated areas within, and sometimes, across MSAs.
For more information, contact attorney Alfred Chiplin (firstname.lastname@example.org) in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760.
 See §302(b)(1) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L. 108–173) (MMA), amending section 1847 of the Social Security Act.
 For a Congressional Research Service report on DMEPOS and its impact on decreasing prices and beneficiary access, see the August 2010 report, “Medicare Durable Medical Equipment: The Competitive Bidding Program” http://heartland.org/sites/default/files/sites/all/modules/custom/heartland_
migration/files/pdfs/29562.pdf; see also the July 2011 HHS, Office of the Inspector General (OIG) report “Most Power Wheelchairs In The Medicare Program Did Not Meet Medical Necessity Guidelines:” http://oig.hhs.gov/oei/reports/oei-04-09-00260.pdf.
 A more detailed discussion of the Round 2 roll out and background information on the DMEPOS program is available at: http://cma.benfredaconsulting.com/2011/09/cms-to-begin-round-two-of-its-competitive-
 42 C.F.R. §414.402 (definitions), particularly the DMEPOS program’s “grandfathering” definitions.
 See 42 C.F.R. §414.408(e)(3)(ii) (payment rules).
 A list of the Round 2 Competitive Bidding CBAs by zip code is available at: http://www.dmecompetitivebid.com/Palmetto/Cbic.Nsf/files/Round_2_ZIP_Codes_
 42 C.F.R. §414.402 (definitions). See also OMB’s standards for defining MSAs: http://www.whitehouse.gov/sites/default/files/omb/fedreg/metroareas122700.pdf.
 The list of Metropolitan Statistical Areas (MSAs) can be found at http://www.dmecompetitivebid.com
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