Competitive Bidding - JD DME

DMEPOS Competitive Bidding Program: Temporary Gap Period

All Medicare Round 2021 Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (DMEPOS) Competitive Bidding Program (CBP) Contracts for Off-the-Shelf (OTS) back braces and OTS knee braces expire on December 31, 2023. Starting January 1, 2024, there will be a temporary gap in the DMEPOS CBP.

The Centers for Medicare & Medicaid Services (CMS) plans to conduct bidding for the next round of the DMEPOS CBP after going through notice and comment rulemaking to further strengthen the DMEPOS CBP.

For additional information on the gap period, please see the Temporary Gap Period (PDF) fact sheet and continue to monitor the CMS.gov and Competitive Bidding Implementation Contractor (CBIC) websites for updates.

Process Change

For dates of service beginning January 1, 2024, and after, there is a temporary gap period in the DMEPOS Competitive Bidding Program (CBP) for off-the-shelf back and knee braces. During the gap period, the prior authorization requirements for HCPCS codes L0648, L0650, L1833, and L1851 change and the competitive bid modifiers KV, J4, and J5 are no longer used. Treating practitioners now have the option to follow the prior authorization process with the standard timeframe of review, request an expedited review, or utilize the ST modifier, indicating acute/emergent need. For more information, refer to the Timeline and Updates section of the Prior Authorization and Pre-Claim Review Initiatives webpage on the CMS website. This process change only affects non-contract competitive bid suppliers who are practitioners/physicians, physical therapists, and occupational therapists.

Round 2021

Round 2021 of the DMEPOS Competitive Bidding Program began on January 1, 2021 and ended December 31, 2023. Round 2021 consolidated the competitive bidding areas (CBAs) that were included in Round 1 2017 and Round 2 Recompete. Round 2021 included 130 CBAs.

OTS back braces HCPCS codes: L0450, L0455, L0457, L0467, L0469, L0621, L0623, L0625, L0628, L0641, L0642, L0643, L0648, L0649, L0650, and L0651.

OTS knee braces HCPCS codes: L1812, L1830, L1833, L1836, L1850, L1851, and L1852.

The DMEPOS Competitive Bidding Program was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The statute requires that Medicare replace the current fee schedule payment methodology for selected Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) items with a competitive bid process. The intent is to improve the effectiveness of the Medicare methodology for setting DMEPOS payment amounts, which will reduce beneficiary out-of-pocket expenses and save the Medicare program money while ensuring beneficiary access to quality items and services.

Under the program, a competition among suppliers who operate in a particular competitive bidding area is conducted. Suppliers are required to submit a bid for selected products. Not all products or items are subject to competitive bidding. Bids are submitted electronically through a web-based application process and required documents are mailed. Bids are evaluated based on the supplier's eligibility, its financial stability, and the bid price. Contracts are awarded to the Medicare suppliers who offer the best price and meet applicable quality and financial standards. Contract suppliers must agree to accept assignment on all claims for bid items and will be paid the bid price amount. The amount is derived from the median of all winning bids for an item.

Face-to-Face Encounter and Written Order Prior to Delivery (WOPD)

The complete Required Face-To-Face Encounter and Written Order Prior To Delivery List, as defined in 42 CFR 410.38(c)(8), is found on the CMS website.

• Required for codes: L1832, L1833, L1851, L0648, and L0650
  • Effective 04/13/22
• Required for codes: L0631, L0637, L1843, L1932, L1940, L1951, L1960, L1970, L2005, L2036
  • Effective 4/17/23

Prior Authorization Required for Orthoses

Additional Prior Authorization information is found on the Prior Authorization Required for Orthoses webpage.

• Required for codes: L1832, L1833, L1851, L0648, and L0650
  • Effective nationwide 10/10/22

Prior Authorization Timelines

Competitive Bid 2021 Modifier Chart - OTS Knee and Back Braces

Gap Period begins for DOS and after January 1, 2024.

Non-Contract Suppliers Exception for Physician/Practitioner or Occupational Therapist (OT)/Physical Therapist (PT) Modifiers Situations

Situations to Bypass Prior Authorization (Prior to DOS 1/1/2024)

In certain situations, there are special modifiers that will cause the claim to bypass prior authorization when billing a claim. These claims will be subject to prepayment review.

• All Medicare physicians or other treating practitioners IN a Competitive Bid Area (CBA), who are not a CB contracted supplier providing a brace in an acute or emergent situation who are enrolled as Medicare DMEPOS suppliers must append the KV or J5 modifier to the claim
  • Practitioners and physicians must append KV modifier to claim line in these circumstances
  • Occupational therapists (OT)/physical therapists (PT) must append J5 modifier to claim line in these circumstances

Refer to chart below for modifier requirements when bypassing prior authorization

Note: More information about Non-Contract Supplier Exceptions in Tips section below

Tips

Beneficiary in Competitive Bid Area

• To verify if beneficiary resides in a CBA, suppliers should:
  • Check eligibility in Noridian Medicare Portal to verify beneficiary's permanent address on file with Social Security
  • Check the beneficiary's zip code (downloadable zip code file, CBA and Zip tab) to verify if in CBA
    • Not in CBA - provide medically necessary brace
    • In CBA - Contract supplier must provide brace

Contract Suppliers

For a comprehensive list of contract supplier locations in each CBA, see the Supplier Directory on the Medicare.gov website.

• Enter zip code of beneficiary's permanent address on file with Social Security
• Enter "brace" in equipment field (Round 2021)
• Mark appropriate brace on list with check mark (Off-the-Shelf Back and/or Knee Brace(s))
• Click Update
• Supplier List will display a warning if zip code is in CBA

Non-Contract Suppliers and Exceptions (Gap period begins 1/1/2024)

Non-Contracted Suppliers (Below only valid through 12/31/2023)

• Non-Contracted Suppliers submitting claims for beneficiaries that reside in a CBA and do not meet the definition of a traveling beneficiary will need to obtain a properly executed ABN for off-the-shelf (OTS) back and knee braces. Suppliers that provide off-the-shelf (OTS) back and knees braces without a properly executed ABN cannot collect payment from the beneficiary.

Non-Contract Supplier Exceptions Fact Sheets for practitioners/physicians, physical therapists, and occupational therapists.

• Physicians and Other Treating Practitioners. Refer to Physicians and Other Treating Practitioners, Physical Therapists, and Occupational Therapists fact sheet on the CMS website.
• Exception: Medicare physicians or other treating practitioners IN a CBA, who are enrolled as Medicare DMEPOS suppliers (without being a competitive bid contract supplier) must append the KV or J5 modifier to the claim only when the following requirements are met:
  • The OTS back brace or OTS knee brace must be furnished by the physician or other treating practitioner to his or her own patient as part of his or her professional service
  • If brace provided prior to surgery or no surgery planned, brace must be medically necessary to be worn at home prior to surgery
• Practitioners and physicians must append KV modifier to claim line in these circumstances
• Occupational therapists (OT)/physical therapists (PT) must append J5 modifier to claim line in these circumstances
• CMS Update: If brace provided post-surgery, claim should adhere to the following guidelines:
  • If brace provided after surgery, claim must have same date of service (DOS) as surgery
  • If brace provided as part of an unbillable follow-up visit during post-operative period and related to recovery
    • Bill with surgery DOS, or
    • Bill with follow-up visit DOS and include narrative indicating brace applies to same date as surgery
      • Narrative example: Brace associated with surgery DOS 05/01/2023
      • Enter narrative in Item 19 of 1500 claim form or 2400/NTE segment of electronic claim
  • If claim denies, appeal with documentation to support need post-surgery
• CMS Update: Appeal rights have been offered for off-the-shelf orthotics furnished by physicians and other treating practitioners in a CBA on DOS January 1, 2021 - December 31, 2023. Braces must have been furnished under the physician exception for these circumstances to allow an appeal:
  • Brace provided at unbillable office visit with KV modifier on claim
  • Brace provided (as necessary part of recovery) at unbillable office visit as part of global services following post-op procedure with KV modifier
• The OTS back brace or OTS knee brace must be billed to a Durable Medical Equipment Medicare Administrative Contractor (DME MAC) using the DMEPOS billing number that is assigned to the physician, the treating practitioner (if possible), or the group practice to which the physician or other treating practitioner has reassigned the right to receive Medicare payment.
• Hospitals: Refer to Hospitals That Are Not Contract Suppliers fact sheet on the CMS website.
• Medicare Secondary Payer: A non-contract supplier may receive a Medicare secondary payment for a competitively bid OTS back or knee brace furnished to a beneficiary residing in a CBA if the beneficiary is required to use that supplier under his or her primary insurance policy.

Modifiers: Physicians/Practitioners and Physical and Occupational Therapists Only

• KV utilized by Physicians/Practitioners; J5 utilized by Physical Therapists and Occupational Therapists
  • When providing brace as part of professional service in beneficiary's CBA (must be same date of service)
• KT not applicable
  • When beneficiary travels to non-CBA for procedure (surgery) and then goes home
  • For beneficiary temporarily living in another CBA or non-CBA

Repairs and Replacements Provided in CBA

Medicare allows for the repair of beneficiary owned items by any Medicare-enrolled supplier. Beneficiary-owned competitively bid OTS back or knee braces that are replaced rather than repaired must be furnished by contract suppliers when beneficiaries obtain these items in a CBA. Refer to Repairs and Replacements of Off-the-Shelf Back and Knee Braces fact sheet on the CMS website.

Former Competitive Bidding Area (CBA) Fee Schedule

Adjusted fees for former Competitive Bidding Areas (CBAs) during a gap period in the DMEPOS Competitive Bidding Program (CBP) are determined by CMS. These items have been paid based on the Former CBA Fee Schedules since 2019 (see MM11064).

To view the Former CBA Fee Schedule, visit theCMS DMEPOS Fee Schedule page

• Select the applicable file for the date of service
  • Under "File Name." Download that ZIP file, and you can open the files for CBA information, which are labeled
    • Former CBA Fee schedule
    • Former CBA National Mail Order diabetic testing supply fee schedule
    • Former CBA ZIP Code

Per 42 CFR Chapter IV, 414.210 - (10) - Payment adjustments for items and services furnished in former competitive bidding areas during temporary gaps in the DMEPOS CBP. During a temporary gap in the entire DMEPOS CBP and/or National Mail Order CBP, the fee schedule amounts for items and services that were competitively bid and furnished in areas that were competitive bidding areas at the time the program(s) was in effect are adjusted based on the SPAs in effect in the competitive bidding areas on the last day before the CBP contract period of performance ended, increased by the projected percentage change in the Consumer Price Index for all Urban Consumers (CPI–U) for the 12-month period ending on the date after the contract periods ended. If the gap in the CBP lasts for more than 12 months, the fee schedule amounts are increased once every 12 months on the anniversary date of the first day of the gap period based on the projected percentage change in the CPI–U for the 12-month period ending on the anniversary date.

Single Payment Amount

Suppliers will find the Single Payment Amounts (SPAs) for the Healthcare Common Procedure Coding System (HCPCS) codes included in Round 2021 of the DMEPOS Competitive Bidding Program on the Competitive Bidding Program Contractor (CBIC) website. Existing payment amounts have been replaced with these SPAs for the selected HCPCS codes in certain CBAs when Round 2021 was implemented on January 1, 2021.

Resource - Round 2021 - DMEPOS CBP

Round 2021 Off the Shelf (OTS) Back and Knee Braces (Gap period begins 1/1/2024)

On October 27, 2020, the Centers for Medicare & Medicaid Services (CMS) announced the single payment amounts for:

• Off-the-shelf (OTS) back braces and OTS knee braces product categories ONLY
  • All other product categories were removed from Round 2021, including the National Mail Order. Please see the CMS announcement for additional information.

Round 2021 of the DMEPOS Competitive Bidding Program began on January 1, 2021 and extends through December 31, 2023. Round 2021 consolidates the CBAs that were included in Round 1 2017 and Round 2 Recompete. Round 2021 includes 130 CBAs.

OTS back braces HCPCS codes: L0450, L0455, L0457, L0467, L0469, L0621, L0623, L0625, L0628, L0641, L0642, L0643, L0648, L0649, L0650, and L0651.

OTS knee braces HCPCS codes: L1812, L1830, L1833, L1836, L1850, L1851, and L1852.

Traveling Beneficiary - KT modifier (Gap period begins 1/1/2024)

The Traveling Beneficiary Fact Sheet is available on the Medicare Learning Network and provides guidance on the rules for traveling beneficiaries and the use of the KT modifier from January 1, 2021, thru December 31, 2023.

The permanent residence is the address on file with the Social Security Administration (SSA). It is the address to which the SSA mails checks and/or correspondence to the beneficiary.

Four important CBP rules to know when a beneficiary needs an OTS back or knee brace while traveling:

• Medicare payment is always based on the beneficiary's permanent residence.
• Which supplier may furnish the OTS back or knee brace is determined based on where the beneficiary purchases the item.
• The supplier that provides the OTS back or knee brace to the Medicare beneficiary must accept assignment (i.e., accept Medicare payment as payment in full) unless the beneficiary's permanent residence is not in a CBA and the beneficiary travels to an area that is not a CBA.
• Suppliers must affix the HCPCS modifier "KT" to claims for OTS back or knee braces that are furnished to beneficiaries who permanently reside in a CBA and need a competitively bid item when they travel outside of the CBA where they reside.

KU Modifier

Effective for dates of service on or after July 1, 2021, we continue the KU modifier fee schedule amounts for wheelchair accessories (including seating systems) and seat and back cushions you provide for wheelchair codes E1161, E1231, E1232, E1233, E1234, E1235, E1236, E1237, E1238, K0005 and K0008. We continue to pay for these items when you provide them for a complex rehabilitative or certain manual wheelchairs and bill them with the KU modifier. Continue to add the KU modifier when billing the manual wheelchair accessories and seat and back cushion codes listed in Attachment A of CR 12345.

• KU Modifier
• MM12345

Modifiers

• J4 - Hospital furnishing DMEPOS item subject to DMEPOS Competitive Bidding Program as a non-contract supplier (Only valid through DOS 12/31/2023)
• J5 - Physical therapists and occupational therapists furnishing DMEPOS item subject to DMEPOS Competitive Bidding Program as a non-contract supplier. Professional service and DME must be billed same date of service. (Only valid through DOS 12/31/2023)
• KE - Used to identify an accessory code that can be dually billed with either a competitive bid or non-competitive bid base item not subject to fee schedule reduction. Only for rural and non-contiguous states. Not appropriate for former competitive bid areas or non-rural locations.
• KL - Any DMEPOS item delivered by mail. This includes shipping services and supplier delivery services.
• KT - Beneficiary resides in a competitive bidding area and travels to a non-competitive bidding area and receives item from a non-contract supplier. The permanent residence is the address on file with the Social Security Administration (SSA). It is the address to which the SSA mails checks and/or correspondence to the beneficiary.
• KU - Only for wheelchair accessories and seat back cushions used with Group 3 Complex Rehab Wheelchair bases.
• KV - DMEPOS item subject to DMEPOS Competitive Bidding Program that is furnished as part of a professional service (non-contract supplier, physicians and other treating practitioners). In limited situations, physicians are allowed to both prescribe and furnish OTS back and knee braces under the in-office ancillary services exception to the physician self-referral law described at 42 CFR 411.355(b), provided they meet all requirements of that exception. Professional service and DME must be billed same date of service. (Only valid through DOS 12/31/2023)

Resources

• DMEPOS Competitive Bidding Program
• Competitive Bidding Implementation Contractor (CBIC) - Bidding and contract suppliers should use this website as their primary source of program information