Medicare Compliance & Reimbursement

No good news for DME in newly passed legislation.  The new prescription drug benefit is grabbing all the newspaper headlines, but front-page news for the durable medical equipment and home respiratory industry is the disastrous competitive bidding provision in the newly passed Medicare bill. House Republican leaders pulled out "a back room victory for a Medicare bill that will restrict access to quality medical care for millions of beneficiaries," American Association for Home-care President and CEO Kay Cox said upon its passage. The industry has "deep outrage over the potential damage that this bill will do to our Medicare beneficiaries," Cox said. Opposition, coming both from conservatives claiming the entire Medicare bill will spend money wildly and liberals arguing that the drug benefit doesn't go far enough and that the managed care privatization goes too far, ultimately wasn't enough to stand in the way of the politically popular legislation. Waves of DME suppliers will be closing their doors thanks to the implementation of competitive bidding called for in the bill, predicts Joan Cross with the Florida Association of Medical Equipment Suppliers. Here are the basics the bill lays out for the bidding process: Phase In. Bidding would begin in the 10 largest metropolitan statistical areas in 2007, and would move to the 80 largest MSAs by 2009. After 2009, the Centers for Medicare & Medicaid Services could apply bidding prices nationally to all items bid upon. Bid items. DME and related supplies and drugs are up for bidding, but lawmakers excluded inhalant drugs and parenteral nutrition from the process. Enteral nutrition still is covered. Inhalant drug prices will be affected by separate drug pricing changes. Bidding cycle. Contracts would come up for rebid after three years. But once suppliers' Medicare business is gone for three years, it's unlikely they will still be in business to rebid, points out Cross, whose state saw its own bidding demonstration in Polk County. Exemptions. CMS may exempt low-population areas in both rural and urban categories, unless they have significant mail order business. Items for which cost savings wouldn't be realized can also be exempted, AAH points out in its summary of the legislation. Supplier qualifications. Suppliers must meet financial and quality standards to bid. In fact, CMS will require all suppliers who wish to do Medicare business to meet certain quality standards, including acquiring certain accreditation. Cross criticizes the measure that will require small suppliers to obtain costly accreditation just to bid on Medicare contracts, then easily leave them with the accreditation expense and no contract - and thus no Medicare income. Safeguards. The bill does specify that Medicare beneficiaries must have access to multiple suppliers to furnish Medicare-covered items, and pledges not to [...]