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DMEPOS Competitive Bidding Program

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.

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Round 2021

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

On April 9, 2020, the non-invasive ventilators product category was removed from Round 2021 due to the novel COVID-19 pandemic.

On October 27, 2020, the Centers for Medicare & Medicaid Services (CMS) announced the single payment amounts and began offering contracts for the off-the-shelf (OTS) back braces and OTS knee braces product categories. All other product categories were removed from Round 2021. Please see the CMS announcement for additional information.

CMS is required by law to recompete contracts under the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program at least once every three years. The contract periods for Round 1 2017, Round 2 Recompete, and the National Mail-Order Recompete expired on December 31, 2018.

Non-contract Suppliers and Exceptions

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

Traveling Beneficiary - KT modifier

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.

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

  1. Medicare payment is always based on the beneficiary’s permanent residence.
  2. Which supplier may furnish the OTS back or knee brace is determined based on where the beneficiary purchases the item.
  3. 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.

The Healthcare Common Procedure Coding System (HCPCS) codes used to bill for OTS back braces: L0450, L0455, L0457, L0467, L0469, L0621, L0623, L0625, L0628, L0641, L0642, L0643, L0648, L0649, L0650, and L0651.

The HCPCS codes used to bill for OTS knee braces: L1812, L1830, L1833, L1836, L1850, L1851, and L1852.

KU Modifier January 1, 2020 The use of the KU modifier will start with claims submitted on July 6, 2020 and be effective for dates of service from January 1, 2020 through June 30, 2021 for certain wheelchair accessories and seat back cushions used with complex rehabilitative manual wheelchairs and certain manual chairs. The full list of accessories impacted start on page 9 of the CMS Change Request 11635 and apply to wheelchair codes K0005, E1161, E1231-E1238 and K0008.
Modifiers
  • J5 - Physical therapists and occupational therapists furnishing DMEPOS item subject to DMEPOS Competitive Bidding Program as a non-contract supplier
  • 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.
  • KY - Used to identify a formerly competitively bid wheelchair accessory code used with a base unit that was not bid for a beneficiary who resides in a former competitive bid area.
  • KG - Used to identify supplies/accessories utilized across multiple former competitive bidding product categories or when same code can be used for both formerly competitively bid and non-competitively bid items.
  • KU - Only for wheelchair accessories and seat back cushions used with Group 3 Complex Rehab Wheelchair bases.
  • 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
  • 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)

 

Resources

 

Last Updated Fri, 12 Feb 2021 14:18:29 +0000

The below are topic specific articles which have been published to "Latest Updates" and sent out in Noridian emails within the past two years. Exclusions to this include time sensitive related announcements such as: Noridian and CMS educational events, Ask-the-Contractor Teleconferences and claims processing downtime.

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