Overview
Currently, Medicare payment for most durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) is based on a fee schedule. However, the Medicare Modernization Act of 2003 (MMA) amended the Social Security Act (the Act) mandating that competitive bidding programs replace the current DMEPOS fee schedule payment amounts for selected items.

For most DMEPOS items, payment rates were based on historical charges, adjusted for inflation at times, and not on current market prices. The Medicare DMEPOS Competitive Bidding Program changes the way that Medicare pays for these items by utilizing bids submitted by DMEPOS suppliers to establish payment amounts.

Competitive Bidding Implementation Contractor
Section 1847 of the Act authorizes the Centers for Medicare & Medicaid Services (CMS) to contract with the competitive bidding implementation contractor (CBIC) to conduct certain functions relating to the administration of the DMEPOS Competitive Bidding Program. These functions include:

• Preparing the requests for bids (RFB)
• Performing preliminary bid evaluations, and
• Ensuring that suppliers meet all applicable financial and quality standards

In addition, the CBIC supports CMS’ efforts to conduct an educational program for beneficiaries, suppliers, and referral agents. The CBIC also assists CMS and its contractors in monitoring the program’s effectiveness, access, and quality. The CBIC’s Web site , contains important and up-to-date information on the Medicare DMEPOS Competitive Bidding Program.

Delay of the Medicare DMEPOS Competitive Bidding Program
The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) was enacted on July 15, 2008. This new law delayed the Medicare DMEPOS Competitive Bidding Program. Items that had been included in the first round of the Medicare DMEPOS Competitive Bidding Program can be furnished by any enrolled DMEPOS supplier in accordance with existing Medicare rules. Payment for these items will be made according to the fee schedule. For additional information, please refer to CMS Change Request 6042 or Medicare Learning Network (MLN) Matters Article MM6042 .

Additional Information
For a comprehensive overview of the Medicare DMEPOS Competitive Bidding Program please refer to the CMS Web site , and the CMS Internet-Only Manual Publication 100-04, Medicare Claims Processing Manual, Chapter 36 . Information is also available on the Medicare DMEPOS Competitive Bidding Program Web site .