If a supplier purchases 5 percent or greater interest in a contract supplier, we can add its location(s) to the seller’s contract using the Contract Supplier Location Update Form signed by the seller if:
• the purchasing supplier and the seller have updated their CMS 855S enrollment applications with the National Supplier Clearinghouse (NSC) and its enrollment records reflect the purchase;
• these companies are considered commonly owned or commonly controlled by the NSC;
• the seller's contract is active (not cancelled or terminated) and the contract supplier (seller) continues to exist and operate as before the stock sale;
• the purchasing supplier’s location(s) meets all of the competitive bidding requirements for the
competitive bidding area (CBA) and product category, such as enrollment, licensure, and accreditation;
• the location(s) is not already on another contract for the same CBA/ product category combination; and
• an authorized official or backup authorized official on record for the seller’s contract signs the form.
Yes, the contract supplier may continue to serve these beneficiaries throughout the remainder of the rental period. By purchasing a grandfathered supplier, the contract supplier is essentially stepping into the shoes of the grandfathered supplier. For that reason, no additional payments will be authorized.
Examples of what contract suppliers will be paid as a grandfathered supplier:
- For rented items in the oxygen product category, the contract supplier will be paid the single payment amount for the remainder of the existing rental period or until the item is no longer medically necessary.
- For rented items in the capped rental product categories (hospital beds; continuous positive airway pressure (CPAP) devices; respiratory assistive devices (RADs); standard (manual and power) wheelchairs and scooters; support surfaces and negative pressure wound therapy (NPWT) pumps, the contract supplier will be paid the fee schedule amount for the remainder of the existing rental period or until the item is no longer medically necessary.
- For rented items in the inexpensive or routinely purchased (IRP) product category (walkers), the contract supplier will be paid the fee schedule amount until the point at which payments for the item equal 100 percent of the fee schedule amount for the purchase of the item.
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.
No. When bidding, each bidder must state its expected capacity to furnish the items in each product category for which it is submitting a bid. The estimated capacity is used during bid evaluation for the purpose of selecting a sufficient number of contract suppliers to meet demand for the product category in the CBA. However, the projected capacity submitted by a bidder does not become a binding term of the contract because contract suppliers are required to furnish the items in their contract to all beneficiaries who maintain a permanent residence in the CBA, or who visit the CBA, and who request the items from them. (See Federal regulations at 42 CFR §414.422.)
The Request for Bids clearly indicates that a contract supplier must furnish competitively bid items to any beneficiary who maintains a permanent residence in or who visits a CBA and who requests those items from the contract supplier, starting on day one of the contract period. Furnishing medically necessary contract items to all beneficiaries throughout the CBA is also a term of the competitive bidding program contract.
Suppliers are not allowed to “pick and choose” which beneficiaries they will serve within a CBA. Furthermore, contract suppliers are required to provide beneficiaries with timely service in accordance with the quality standards. Refusing to furnish medically necessary competitively bid items to beneficiaries throughout the entire CBA is a breach of contract, and may lead to contract termination.
Medicare has issued regulations implementing new requirements for DMEPOS suppliers, including DMEPOS contract suppliers (see the interim final rule with comment period (IFC) titled Medicare and Medicaid Programs; Changes in Provider and Supplier Enrollment, Ordering and Referring, and Documentation Requirements; and Changes in Provider Agreements published on May 5, 2010; 75 FR 24437).
The requirements for physicians and treating practitioners to be enrolled in Medicare as a condition for Medicare claims payment, as set forth in that regulation, are consistent with contract suppliers’ responsibilities under the Competitive Bidding Program. Contract suppliers are expected to follow the requirements set forth in the May 5, 2010, IFC because covered items under the Competitive Bidding Program generally include only those DMEPOS items for which payment would otherwise be made under Medicare’s DMEPOS fee schedules outside the Competitive Bidding Program.
When Medicare begins to implement this new requirement, competitively bid and non-competitively bid items and services ordered by a physician or other treating practitioner who is not enrolled in Medicare will not be paid, as stipulated by the Affordable Care Act (ACA 2010). Therefore, contract suppliers would not be required to furnish items to beneficiaries whose ordering physician or treating practitioner is not enrolled with Medicare in PECOS.
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.
There are 7 different types of dual eligible beneficiaries. However, out of the 7 types only the 4 types identified below are provided actual Medicare cost-sharing benefits from Medicaid. The other 3 types receive Medicaid payment of Medicare premiums only.
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:
Data entered into Form C does not save. You may enter all required information at one time and then select “View Completed Form and Print.”
You may also choose to enter product information for each single product category and competitive bidding area (CBA) combination and then select “View Completed Form and Print.” You must print each form since this information is not saved.
It is important that you print, sign and send ALL forms to the CBIC by the deadline. You must submit information for all product category and CBA combinations for which you were awarded a contract.
Please remember that you will not be able to make any changes to your information once you proceed to the “PRINT” page. Please review all information and make any changes before you proceed to print. If you use the browser to go back after you are on the print screen, you will need to re-enter all the information.
You can either mail or fax the form to the CBIC. However, we recommend that you fax it to the CBIC at 803-264-6228.
If you choose to mail the form, please send it to:
Competitive Bidding Implementation Contractor
2743 Perimeter Pkwy Ste 200-400
Augusta, GA 30909-6499
You can call the CBIC customer service center at 877-577-5331, and we will verify whether the report has been received.
You should expect to see the updated product information posted within 30 days after the Form C submission deadline.
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.
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.
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.
Yes, Medicare law requires the supplier (contract or non-contract) who furnished the oxygen in the 36th month to provide oxygen, oxygen equipment, and related supplies and accessories until the beneficiary’s medical need for the oxygen ceases or until the end of the reasonable useful lifetime of the oxygen equipment is reached. Once the five-year reasonable useful lifetime for the stationary oxygen equipment ends, the beneficiary can elect to obtain new oxygen equipment, but they must obtain the replacement equipment from a contract supplier. Once the contract supplier furnishes the new, replacement equipment, a new 36-month rental cap and period of continuous use and a new five-year reasonable useful lifetime for both the stationary and portable oxygen equipment will begin.
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.).
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. This requirement continues to apply under the DMEPOS Competitive Bidding Program, regardless of the role of the supplier (i.e., contract supplier, grandfathered supplier, or non-contract supplier not electing to become a grandfathered supplier).
It is important to know that this requirement applies even in situations in which the beneficiary relocates on a temporary (i.e., snowbird) or permanent basis outside the supplier’s normal service area. The supplier that furnishes the oxygen or oxygen equipment in the 36th month of continuous use of oxygen and oxygen equipment is prohibited from transferring its ongoing obligations to a contract supplier, regardless of whether it has elected to become a grandfathered supplier and regardless of whether the beneficiary remains in the competitive bidding area (CBA).
Yes. The beneficiary will be required to obtain his or her new equipment from a contract supplier since there is a break in need of greater than 60 days plus the days remaining in the rental month.
A break in need is when the beneficiary’s medical condition changes or improves and the equipment or service is no longer required. In these situations, the period of continuous use of the equipment in the prior rental episode ended and a new period of continuous use and 36- or 13-month rental period may begin as long as the contract supplier submits a new prescription, new medical necessity documentation and a statement describing the reason for the interruption which shows that medical necessity in the prior episode ended.
In all cases where the break in need for oxygen equipment occurs after the supplier has received payment for the 36th month of continuous use, the supplier is responsible for continuing to furnish the oxygen equipment during any period of medical need for the remainder of the reasonable useful lifetime of the equipment. In these situations, the supplier must continue furnishing the equipment, and a new 36-month rental payment period does not begin regardless of the length of the break in medical need and regardless of the number of breaks in medical need.
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.
Contract suppliers are required to provide all items within a product category. However, as with any Medicare enrolled supplier, a supplier may subcontract for the purchase of inventory, delivery and instruction on the use of an item, or the maintenance and repair of rented equipment. Therefore, a contract supplier may subcontract for the purchase of inventory from a subcontractor and for the delivery and instructions on the use of the equipment. In accordance with the quality standards and the supplier standards, it is expected that beneficiaries and referral agents will communicate with the contract supplier when arranging for DMEPOS items and services. Also, remember that contract suppliers are 100% responsible for services furnished to beneficiaries and that subcontractors can’t do everything. Please review the Subcontracting Fact Sheet and Subcontracting FAQs on this website for more 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.
The DMEPOS supplier must have title to the equipment when the equipment is furnished to the beneficiary. For further guidance on the purchase of inventory requirements, visit the National Supplier Clearinghouse (NSC) website, www.palmettogba.com/NSC.
A contract supplier may subcontract specifically for the delivery of the item (e.g., by using a common carrier such as Federal Express, the United States Postal Service, or the United Parcel Service). If the subcontractor only delivers the item, the subcontractor need not be accredited. If the subcontractor is providing more than the delivery by setting up the equipment or giving instructions about the use of the item, then the subcontractor must be accredited.
All contract suppliers and their subcontractors must comply with federal laws and regulations including the Stark and federal anti-kickback statutes. To report suspected illegal practices, please contact the Competitive Bidding Implementation Contractor (CBIC) Customer Service Center toll-free at 877-577-5331.
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.
The Grandfathering for Rented DME fact sheet indicates that the current supplier and the new contract supplier must coordinate the pickup and delivery of the equipment so that service to the beneficiary is not disrupted. The current supplier should provide copies of all supporting documentation, such as the physician order or Certificate of Medical Necessity (CMN) when applicable, to the new contract supplier. The CPAP compliance data would be an example of supporting documentation. The contract supplier needs to obtain all documents and information necessary to demonstrate adherence to coverage requirements set forth in statute, regulation, rule, or national or local coverage determinations.
For more information, please view the Grandfathering for Rented DME fact sheet, by selecting a round from the left hand navigation pane, then selecting Fact Sheets under Educational Information.
No, assuming the patient met the coverage requirements during the initial 90-day trial.