Yes. When CMS signs the novation agreement, it will become effective retroactive to the effective date of the CHOW.

Please wait to submit claims for contract items you furnish after the CHOW until CMS notifies you that the novation agreement has been accepted.

If you submit claims before the novation agreement has been accepted, the Durable Medical Equipment Medicare Administrative Contractors (DME MACs) will not know that you are a contract supplier, and the claims may be denied.

Payment for covered items furnished after the effective date of the CHOW will be made at the single payment amount according to the competitive bidding contract.

Each state Medicaid program is legally responsible for paying suppliers for any Medicare cost-sharing that is due for QMBs and QMB Plus beneficiaries, according to its CMS-approved Medicare cost-sharing payment methodology. Federal law gives states the authority to pay cost-sharing for QMBs and QMB Plus beneficiaries at the Medicare cost-sharing amount, the Medicaid State Plan rate for the same service, or a rate between those amounts that is established by the state and approved by CMS. States are allowed to limit payment for QMB and QMB Plus cost-sharing to the amount necessary to provide a total payment to the supplier (including Medicare, Medicaid, required nominal Medicaid co-payments, and third party payments) equal to the amount a state would have paid for the service under the State Plan. When the cost-sharing claim is for Medicare-covered services that are not included in the Medicaid State Plan, the state is still liable to pay the cost-sharing claim, but may establish reasonable payment limits, approved by CMS, for the service.  

To receive payment, DMEPOS contract suppliers must enroll as a State Medicaid provider with each state in their service area. Contact information for each State’s Medicaid program is available at www.medicaid.gov. 

For more information about QMBs and other individuals who are dually eligible to receive Medicare and Medicaid benefits, please refer to the Medicare Learning Network® publication titled “Medicaid Coverage of Medicare Beneficiaries (Dual Eligibles),” which is available at http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/medicare_beneficiaries_dual_eligibles_at_a_glance.pdf 

For additional information, please review:

• The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin; 08/02/2013 - DMEPOS Competitive Bidding
• The Center for Medicaid and CHIP Services (CMCS) Informational Bulletin; 07/07/2013 - Payment of Medicare Cost Sharing for Qualified Medicare Beneficiaries (QMBs)
• MLN Matters - Prohibition on Balance Billing Qualified Medicare Beneficiaries (QMBs)
  

You can call the CBIC customer service center at 877-577-5331, and we will verify whether the report has been received.

The non-contract supplier must continue to furnish and bill for the rented DME item up to the first "anniversary date" that occurs after the start of the Competitive Bidding Program. (The anniversary date is the day of the month on which the item was first delivered to the beneficiary. Please note that an anniversary date can change if there is a break in service or need of more than 30 days.)

Under no circumstances may the non-contract supplier discontinue services by picking up a medically necessary item prior to the end of a month for which the supplier is eligible to receive a rental payment, even if the last day ends after the start date of the Competitive Bidding Program.

If a beneficiary chooses to switch to a contract supplier, the non-contract supplier and the contract supplier must make arrangements for the pickup of the old equipment and delivery of the new equipment that are suitable to the beneficiary. Such arrangements need to be coordinated between the non-contract and contract suppliers to ensure that the beneficiary has continued access to medically necessary equipment.

The contract supplier can start billing beginning with the first anniversary date that occurs once the Competitive Bidding Program begins.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.

If a beneficiary who would otherwise be entitled to obtain oxygen from a grandfathered supplier changes to a contract supplier, the contract supplier will be paid at least 10 monthly payment amounts at the single payment amount regardless of how many months the previous supplier was paid.

For example, for rental agreements in months 2 through 26, the new contract supplier will be paid for the remaining rental months of the period. Contract suppliers assuming rental agreements that are in months 27 or later will receive a minimum of 10 payments regardless of how many months the previous supplier was paid.

If the beneficiary changes to a new contract supplier, the new contract supplier must replace the equipment. If the beneficiary changes from a contract supplier to another contract supplier, the new contract supplier is NOT entitled to a minimum number of months of payment and will be paid the single payment amount for the duration of the rental period not to exceed 36 months.

If a beneficiary who would otherwise be entitled to obtain a capped rental DME item from a grandfathered supplier changes to a contract supplier, a new 13-month rental period begins regardless of how many months the previous supplier was paid. However, rental payments only continue if the item continues to be medically necessary. The contract supplier will be paid the single payment amount. If the beneficiary changes from a contract supplier to another contract supplier, a new rental period does NOT begin, and the new contract supplier will be paid the single payment amount for the duration of the capped rental period.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.

No. A supplier that chooses to become a grandfathered supplier for an item must continue to provide the item to all beneficiaries who choose to continue receiving the item from the grandfathered supplier.

A grandfathered supplier for oxygen and oxygen equipment must continue furnishing the oxygen and oxygen equipment for any period of medical need for the remainder of the reasonable useful lifetime (five years) of the equipment.

A grandfathered supplier for other rented durable medical equipment (DME) must furnish the item for the remaining months of the rental period, unless the item is no longer medically necessary. For capped rental DME, the grandfathering relationship ends when the ownership is transferred to the beneficiary or the item is no longer medically necessary. For example, if a non-contract supplier grandfathers the rental of a CPAP device, the supplier must continue to rent the item to the beneficiary unless the ownership is transferred to the beneficiary or the item is no longer medically necessary.

After the DMEPOS Competitive Bidding Program is implemented, when a new period of continuous use begins following a break in need of greater than 60 days plus the days remaining in the last paid rental month, the beneficiary must obtain new or additional equipment from a contract supplier.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.

No. This is considered a temporary interruption in billing or a break in service. The beneficiary’s use of the equipment did not cease while he or she was inpatient. Therefore, the medical need never ended. The grandfathered supplier must continue providing the oxygen or rented DME item upon the beneficiary’s discharge from the hospital or facility. This policy applies to any type of break in service (e.g., admission to a nursing facility, enrollment in a managed care plan, travel out of the country, etc.).

No. Contract suppliers are eligible to begin a new capped rental period or entitled to receive additional payments for oxygen only when a beneficiary is otherwise eligible to receive equipment from a grandfathered supplier. Regulations at 42 CFR 414.408(j) indicate that suppliers can become grandfathered suppliers only for beneficiaries permanently residing in a CBA who were renting DME or oxygen from them prior to the implementation of the program. Beneficiaries not residing in a CBA at the time the program began are not eligible for the grandfathering option. Therefore, the capped rental period for DME does not restart and the contract supplier is not entitled to receive additional oxygen rental payments, as specified in 42 CFR 414.408(h).

Beneficiaries moving into a CBA after the competitive bidding program becomes effective must use a contract supplier to receive competitively bid oxygen and DME. The moving beneficiary must return his/her rented item to the original supplier and receive replacement equipment from a contract supplier. A contract supplier is entitled to receive payments for the remainder of the rental period or until the equipment is no longer medically necessary, whichever occurs first.

The competitive bidding program has not changed the coverage criteria or medical necessity documentation requirements for competitively bid items.

A new detailed written order is required when a beneficiary switches suppliers. Each supplier that bills for an item must, in the event of an audit, be able to produce sufficient information to show that the coverage criteria and related medical necessity documentation requirements are met. The Medicare law requires that the supplier that furnishes the oxygen and oxygen equipment during the 36th month of continuous use must continue to furnish the oxygen and oxygen equipment after the cap for any period of medical need for the remainder of the reasonable useful lifetime of the equipment.

For more information, please view the DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.

If a beneficiary who would otherwise be entitled to obtain oxygen from a grandfathered supplier changes to a contract supplier, the contract supplier will be paid at least 10 monthly payment amounts at the single payment amount regardless of how many months the previous supplier was paid.

For example, for rental agreements in months 2 through 26, the new contract supplier will be paid for the remaining rental months of the period. Contract suppliers assuming rental agreements that are in months 27 or later will receive a minimum of 10 payments regardless of how many months the previous supplier was paid.

If the beneficiary changes to a new contract supplier, the new contract supplier must replace the equipment. If the beneficiary changes from a contract supplier to another contract supplier, the new contract supplier is NOT entitled to a minimum number of months of payment and will be paid the single payment amount for the duration of the rental period not to exceed 36 months.

If a beneficiary who would otherwise be entitled to obtain a capped rental DME item from a grandfathered supplier changes to a contract supplier, a new 13-month rental period begins regardless of how many months the previous supplier was paid. However, rental payments only continue if the item continues to be medically necessary. The contract supplier will be paid the single payment amount. If the beneficiary changes from a contract supplier to another contract supplier, a new rental period does NOT begin, and the new contract supplier will be paid the single payment amount for the duration of the capped rental period.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.

The non-contract supplier must continue to furnish and bill for the rented DME item up to the first "anniversary date" that occurs after the start of the Competitive Bidding Program. (The anniversary date is the day of the month on which the item was first delivered to the beneficiary. Please note that an anniversary date can change if there is a break in service or need of more than 30 days.)

Under no circumstances may the non-contract supplier discontinue services by picking up a medically necessary item prior to the end of a month for which the supplier is eligible to receive a rental payment, even if the last day ends after the start date of the Competitive Bidding Program.

If a beneficiary chooses to switch to a contract supplier, the non-contract supplier and the contract supplier must make arrangements for the pickup of the old equipment and delivery of the new equipment that are suitable to the beneficiary. Such arrangements need to be coordinated between the non-contract and contract suppliers to ensure that the beneficiary has continued access to medically necessary equipment.

The contract supplier can start billing beginning with the first anniversary date that occurs once the Competitive Bidding Program begins.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.

If a beneficiary who would otherwise be entitled to obtain oxygen from a grandfathered supplier changes to a contract supplier, the contract supplier will be paid at least 10 monthly payment amounts at the single payment amount regardless of how many months the previous supplier was paid.

For example, for rental agreements in months 2 through 26, the new contract supplier will be paid for the remaining rental months of the period. Contract suppliers assuming rental agreements that are in months 27 or later will receive a minimum of 10 payments regardless of how many months the previous supplier was paid.

If the beneficiary changes to a new contract supplier, the new contract supplier must replace the equipment. If the beneficiary changes from a contract supplier to another contract supplier, the new contract supplier is NOT entitled to a minimum number of months of payment and will be paid the single payment amount for the duration of the rental period not to exceed 36 months.

If a beneficiary who would otherwise be entitled to obtain a capped rental DME item from a grandfathered supplier changes to a contract supplier, a new 13-month rental period begins regardless of how many months the previous supplier was paid. However, rental payments only continue if the item continues to be medically necessary. The contract supplier will be paid the single payment amount. If the beneficiary changes from a contract supplier to another contract supplier, a new rental period does NOT begin, and the new contract supplier will be paid the single payment amount for the duration of the capped rental period.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.

No. A supplier that chooses to become a grandfathered supplier for an item must continue to provide the item to all beneficiaries who choose to continue receiving the item from the grandfathered supplier.

A grandfathered supplier for oxygen and oxygen equipment must continue furnishing the oxygen and oxygen equipment for any period of medical need for the remainder of the reasonable useful lifetime (five years) of the equipment.

A grandfathered supplier for other rented durable medical equipment (DME) must furnish the item for the remaining months of the rental period, unless the item is no longer medically necessary. For capped rental DME, the grandfathering relationship ends when the ownership is transferred to the beneficiary or the item is no longer medically necessary. For example, if a non-contract supplier grandfathers the rental of a CPAP device, the supplier must continue to rent the item to the beneficiary unless the ownership is transferred to the beneficiary or the item is no longer medically necessary.

After the DMEPOS Competitive Bidding Program is implemented, when a new period of continuous use begins following a break in need of greater than 60 days plus the days remaining in the last paid rental month, the beneficiary must obtain new or additional equipment from a contract supplier.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.

No. This is considered a temporary interruption in billing or a break in service. The beneficiary’s use of the equipment did not cease while he or she was inpatient. Therefore, the medical need never ended. The grandfathered supplier must continue providing the oxygen or rented DME item upon the beneficiary’s discharge from the hospital or facility. This policy applies to any type of break in service (e.g., admission to a nursing facility, enrollment in a managed care plan, travel out of the country, etc.).

No. Contract suppliers are eligible to begin a new capped rental period or entitled to receive additional payments for oxygen only when a beneficiary is otherwise eligible to receive equipment from a grandfathered supplier. Regulations at 42 CFR 414.408(j) indicate that suppliers can become grandfathered suppliers only for beneficiaries permanently residing in a CBA who were renting DME or oxygen from them prior to the implementation of the program. Beneficiaries not residing in a CBA at the time the program began are not eligible for the grandfathering option. Therefore, the capped rental period for DME does not restart and the contract supplier is not entitled to receive additional oxygen rental payments, as specified in 42 CFR 414.408(h).

Beneficiaries moving into a CBA after the competitive bidding program becomes effective must use a contract supplier to receive competitively bid oxygen and DME. The moving beneficiary must return his/her rented item to the original supplier and receive replacement equipment from a contract supplier. A contract supplier is entitled to receive payments for the remainder of the rental period or until the equipment is no longer medically necessary, whichever occurs first.

The competitive bidding program has not changed the coverage criteria or medical necessity documentation requirements for competitively bid items.

A new detailed written order is required when a beneficiary switches suppliers. Each supplier that bills for an item must, in the event of an audit, be able to produce sufficient information to show that the coverage criteria and related medical necessity documentation requirements are met. The Medicare law requires that the supplier that furnishes the oxygen and oxygen equipment during the 36th month of continuous use must continue to furnish the oxygen and oxygen equipment after the cap for any period of medical need for the remainder of the reasonable useful lifetime of the equipment.

For more information, please view the DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.

If a beneficiary who would otherwise be entitled to obtain oxygen from a grandfathered supplier changes to a contract supplier, the contract supplier will be paid at least 10 monthly payment amounts at the single payment amount regardless of how many months the previous supplier was paid.

For example, for rental agreements in months 2 through 26, the new contract supplier will be paid for the remaining rental months of the period. Contract suppliers assuming rental agreements that are in months 27 or later will receive a minimum of 10 payments regardless of how many months the previous supplier was paid.

If the beneficiary changes to a new contract supplier, the new contract supplier must replace the equipment. If the beneficiary changes from a contract supplier to another contract supplier, the new contract supplier is NOT entitled to a minimum number of months of payment and will be paid the single payment amount for the duration of the rental period not to exceed 36 months.

If a beneficiary who would otherwise be entitled to obtain a capped rental DME item from a grandfathered supplier changes to a contract supplier, a new 13-month rental period begins regardless of how many months the previous supplier was paid. However, rental payments only continue if the item continues to be medically necessary. The contract supplier will be paid the single payment amount. If the beneficiary changes from a contract supplier to another contract supplier, a new rental period does NOT begin, and the new contract supplier will be paid the single payment amount for the duration of the capped rental period.

For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.

A contract supplier is responsible for repairing equipment that the supplier is currently renting to a Medicare beneficiary, including oxygen equipment furnished after the equipment rental payment cap. 

The monthly rental payments made by Medicare for durable medical equipment (DME) and oxygen equipment include payment for necessary repairs, maintenance and servicing of the rented equipment. For oxygen equipment, the statute and regulations require the supplier to continue furnishing the oxygen equipment after the rental payment cap for any period of medical need for the remainder of the reasonable useful lifetime of the oxygen equipment. A contract supplier may repair the rental equipment itself or subcontract for this service.

CMS recognizes that contract suppliers may not have the training or expertise to repair all brands or types of equipment; therefore, a contract supplier is not obligated to repair beneficiary-owned equipment. Any Medicare-enrolled supplier may perform repairs to beneficiary-owned equipment.

Under the Competitive Bidding Program, the contract supplier is responsible for maintaining rented equipment. Maintenance and servicing of beneficiary-owned equipment may be performed by any supplier with a valid Medicare billing number. All Medicare-enrolled suppliers, including contract suppliers, must be in compliance with all of the supplier standards and be accredited. The Medicare-enrolled supplier is always responsible for meeting the supplier standards under 42 CFR 424.57, regardless of whether it chooses to make repairs or perform maintenance directly or through a subcontractor.

For more information, please view the Repairs and Replacement fact sheet, which you can find on this website by selecting a round from the left hand navigation pane, then selecting Fact Sheets under Educational Information.  

If you already have a contractual agreement with your subcontractor, you may submit a copy of that agreement along with your required documents.

For more information, please view the Subcontracting fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.

All DMEPOS suppliers, including contract suppliers, must comply with the DMEPOS supplier standards. The primary supplier is responsible for ensuring that its subcontractors perform in compliance with all applicable laws, regulations, and policies. Consistent with the DMEPOS supplier standards, a subcontractor may provide the following: 1) Purchase of inventory: The supplier standard at 42 CFR 424.57 (c)(4) requires that the DMEPOS supplier, “Fills orders, fabricates, or fits items from its own inventory or by contracting with other companies for the purchase of items necessary to fill the order. If it does, it must provide, upon request, copies of contracts or other documentation showing compliance with this standard. A supplier may not contract with any entity that is currently excluded from the Medicare program, any state health care programs, or from any other federal government executive branch procurement or non-procurement program or activity.” A subcontractor that only performs this service does not need to be accredited. 2) Delivery and instruction on use of Medicare-covered item: The supplier standard at 42 CFR 424.57 (c)(12) requires that the DMEPOS supplier, “Must be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery. (The supplier must document that it or another qualified party has, at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively.)” A subcontractor that only delivers the item does not need to be accredited. If the subcontractor provides more than the delivery by setting up the equipment or giving instructions about the use of the item, then the subcontractor needs to be accredited unless a professional exemption applies. 3) Maintenance and repair of rented equipment: The supplier standard at 42 CFR 424.57 (c)(14) requires that the DMEPOS supplier, “Must maintain and replace at no charge or repair directly, or through a service contract with another company, Medicare-covered items it has rented to beneficiaries. The item must function as required and intended after being repaired or replaced.” A subcontractor that only repairs equipment that a supplier is renting to a beneficiary does not need to be accredited. If the subcontractor provides more than the repair of the equipment by setting up the repaired item or giving instructions about the use of the repaired item, then the subcontractor needs to be accredited unless a professional exemption applies.

Services such as intake and assessment, coordination of care with the physician, submitting claims on behalf of the beneficiary, ownership and responsibility for equipment furnished to the beneficiary, ensuring product safety, etc., are all services for which the primary supplier is responsible.

Medicare program integrity guidelines require a new order when there is a change in suppliers. When a beneficiary transitions from a non-contract supplier to a contract supplier or from a contract supplier to a contract supplier, this constitutes a change in suppliers and a new detailed written order is required.

Under competitive bidding, most transitions from non-contract suppliers to contract suppliers will occur during the first few months of the contract period. In order to facilitate these transitions for new competitive bidding contract suppliers and avoid disruptions in service for beneficiaries during the first few months of the contract period, the contract supplier is only required to obtain a new dispensing order from the treating physician prior to providing a competitively bid item. The contract supplier does not need to acquire a detailed written order before submitting a claim for a competitively bid item furnished prior to November 1, 2013, but must obtain the detailed written order prior to November 1, 2013. For changes in suppliers that occur on or after November 1, 2013, the new contract supplier does need to acquire a detailed written order before submitting a claim for a competitively bid item.

In addition, for changes in suppliers that occur before November 1, 2013, a new dispensing order must be obtained before submitting a claim for a competitively bid item if the contract supplier is not able to obtain or validate the original order and other required documents from the non-contract supplier. If documentation in the beneficiary’s medical record as of the date of the transition is obtained from the non-contract supplier and that documentation meets Medicare requirements for documenting medical necessity, the contract supplier does not have to obtain a new written order until November 1, 2013. Copies of documents, rather than original documents, are acceptable during the transition period prior to November 1, 2013. For the Round 2 and national mail-order competitions, this policy applies to changes in suppliers for competitively bid items from a non-contract supplier to a contract supplier in which the transition to the new supplier and initial date of service for the new equipment takes place from July 1, 2013, through October 31, 2013.

Note: The coverage criteria for an item are unaffected by the competitive bidding status of a supplier. Each supplier that bills for an item must, in the event of an audit, be able to produce sufficient information to show that the reimbursement criteria are met. Suppliers may share information among themselves. If required information is not available, it may be necessary to repeat testing, required trials, physician visits, etc., in order to be able to justify payment. Medicare claims payment history does not provide the type of information necessary to demonstrate that coverage criteria have been met.

New accessories or supplies, such as the CPAP mask in the example given, would not be necessary just because of the transition to the new supplier. The normal utilization parameters continue to apply unless the accessory previously purchased from the non-contract supplier does not work with the new equipment furnished by the contract supplier. If a previously purchased accessory is not compatible with the new equipment, the contract supplier may bill for the new item(s). Due to claims editing limitations, the new item(s) may deny for “same or similar” and require a redetermination. Resolution through the appeals channel is the proper process to follow. Changing base equipment that renders the accessories unusable due to incompatibility is a justifiable reason to replace the accessory.

Note: Most supplies used with PAP devices are dispensed in three-month amounts. With the exception of humidifiers and certain filters, these supplies are regarded as interchangeable between devices. Thus, the supplies obtained in December should be sufficient to meet the beneficiary’s needs until the next quarter, at which time the new supplier may provide and bill for a three-month supply.

No, assuming the patient met the coverage requirements during the initial 90-day trial.