DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
 
 
CMCS Informational Bulletin 
 
DATE:    August 2, 2013 
 
FROM:   Cindy Mann, Director  
Center for Medicaid and CHIP Services  
 
SUBJECT:   Medicare Competitive Bidding Program for Durable Medical Equipment 
and Coordination of Benefits for Beneficiaries Eligible for Medicare and 
Medicaid (Dual Eligibles) 
 
This Informational Bulletin provides information for state Medicaid agencies and other 
interested parties about Medicares Competitive Bidding Program for certain durable medical 
equipment, prosthetics, orthotics, and supplies (DMEPOS).  In most cases under this program, 
Medicare will only pay contract suppliers to furnish certain DMEPOS to beneficiaries with 
Original Medicare, including dual eligibles, in competitive bidding areas (CBAs).  These dual 
eligible beneficiaries are not enrolled in any Medicare Advantage plan, but may be enrolled in 
Medicaid Managed Care Organizations (MCOs). The Bulletin discusses Medicaid coverage for 
Medicare cost-sharing amounts for DMEPOS for dual eligibles and Medicaid enrollment of 
Medicare contract suppliers, including those providers located in another state.   
 
Medicare Competitive Bidding Program for DMEPOS:  Background 
 
Beginning July 1, 2013, Medicare expanded its competitive bidding program for DMEPOS to more 
areas of the country.  This program changes the amount Medicare pays for certain DMEPOS and makes 
changes as to which suppliers Medicare will pay to provide these items.   
 
The DMEPOS Competitive Bidding Program applies to beneficiaries with Original Medicare whose 
permanent residence is in a zip code that is part of a CBA or who obtain competitively bid items while 
visiting a CBA.  These individuals will need to obtain their equipment and supplies from a Medicare 
contract supplier in order for Medicare to help pay for the items unless an exception applies.     
 
Round 1 of the program began on January 1, 2011 and is in effect in certain zip codes in these states:  
California, Florida, Indiana, Kansas, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South 
Carolina and Texas.  
 
A complete list of the areas included in Round 2 of the program is available at 
http://www.cms.gov/Outreach-and-
Education/Outreach/Partnerships/Downloads/DMEPOSBeneFactSheetMarch2013.pdf.   
  CMCS Informational Bulletin  Page 2 
 
Obtaining Competitively Bid DMEPOS from Contract Suppliers 
 
A contract supplier must agree to furnish covered items under its contract to any beneficiary who 
maintains a permanent residence in or visits a competitive bidding area and requests those items 
from the contract supplier. The only exception to this rule is a skilled nursing facility or nursing 
facility that has been awarded a contract as a specialty supplier.  A specialty supplier may furnish 
contract items to its own residents only.   
 
Contract suppliers cant refuse to furnish Medicare-covered DMEPOS items that are in their 
contracts.  They are not eligible for Medicare payment for competitively bid items that arent in 
their contracts unless there is an exception. 
 
Obtaining Other DMEPOS 
 
Non-competitively bid items can be furnished by any Medicare-enrolled supplier that is qualified 
to furnish them.  There is no requirement for a beneficiary to have any interaction with a contract 
supplier for a non-competitively bid item; the beneficiary can simply go to any Medicare-
enrolled supplier.  
 
National Mail-Order Program for Diabetic Testing Supplies 
 
Medicare implemented a national mail-order program for diabetic testing supplies on July 1, 2013. 
Beneficiaries with Original Medicare will need to use a Medicare national mail-order contract supplier 
for Medicare to pay for diabetic testing supplies that are delivered to their homes. If beneficiaries dont 
want their diabetic testing supplies delivered to their home, they can go to any local store (local 
pharmacy or storefront supplier) thats enrolled with Medicare and buy them there. 
 
DMEPOS Included in Round 2 of the Program 
 
The categories of items and services included in Round 2 of the program are:  
 
1.  Oxygen, oxygen equipment, and supplies 
2.  Standard (power and manual) wheelchairs, scooters, and related accessories 
3.  Enteral nutrients, equipment, and supplies 
4.  Continuous Positive Airway Pressure (CPAP) devices, Respiratory Assist Devices 
(RADs) and related supplies and accessories 
5.  Hospital beds and related accessories 
6.  Walkers and related accessories 
7.  Negative Pressure Wound Therapy (NPWT) pumps and related supplies and 
accessories 
8.  Support surfaces (Group 2 mattresses and overlays) 
 
Beneficiaries in Round 2 CBAs who were renting certain medical equipment or receiving oxygen or 
oxygen equipment on July 1, 2013 may have the choice to stay with their current supplier even if the  CMCS Informational Bulletin  Page 3 
 
supplier does not have a contract with Medicare.  A non-contract supplier can choose to become a 
grandfathered supplier and continue to rent items to a Medicare beneficiary who permanently lives in 
a CBA if the non-contract supplier was renting the item to the beneficiary at the time the competitive 
bidding program was implemented. Grandfathered suppliers may not furnish competitively bid items to 
new Medicare beneficiaries in Round 2 CBAs after July 1, 2013 unless there is another applicable 
exception.   
   
 
Dual Eligibles:  Coordination of Medicare and Medicaid Coverage 
 
All Original Medicare beneficiaries who also have Medicaid coverage and who live in a CBA will have 
to get competitively bid DMEPOS from a Medicare contract supplier or a grandfathered supplier in 
most cases.   The principles that apply to obtaining competitively bid DMEPOS in a CBA also apply to 
Original Medicare beneficiaries who are enrolled in MCOs, if the state Medicaid program pays the 
MCO a capitation rate that includes MCO payment of Medicare cost-sharing amounts. 
 
Medicare CBAs may include zip codes in more than one state.  In this situation, while the DMEPOS 
may come from an out-of-state provider, the DMEPOS is actually being furnished in-state and the 
provisions of 42 CFR 431.52 that limit payment to out-of-state providers dont apply. 
 
Medicare Cost-Sharing Amounts and Medicaid State Plan-Covered Services Not Covered by Medicare 
 
Medicaid will pay the cost-sharing amounts (deductibles and coinsurance) for these services according 
to the currently approved Medicare cost-sharing payment methodology in the Medicaid State Plan.  Dual 
eligibles are responsible for payment of required nominal Medicaid co-payments, if applicable to the 
DMEPOS provided.  
 
Qualified Medicare Beneficiary (QMB) and QMB Plus Dual Eligibles 
 
  For the QMB only, Medicaid pays Medicare cost-sharing amounts only.  If Medicare 
denies payment, Medicaid will not pay for the DMEPOS.  
 
  For QMB Plus, Medicaid will pay Medicare cost-sharing amounts for Medicare-covered 
DMEPOS. If Medicare doesnt cover the DMEPOS, but the Medicaid state plan does, 
Medicaid will pay for the DMEPOS, subject to limitations established in the state plan, 
when the beneficiary obtains the item or service from a Medicaid-participating provider.  
  
  Providers are strictly prohibited under section 1902(n)(3) of the Social Security Act from 
seeking to collect any amount from the QMB or QMB Plus beneficiary for Medicare 
deductibles or coinsurance (other than nominal co-payments under Medicaid, if 
applicable), even if the Medicaid programs payment is less than the total amount of the 
Medicare deductibles and coinsurance. 
Specified Low-Income Beneficiary (SLMB) Plus, and Full Benefit Dual Eligible (FBDE) 
Beneficiaries  CMCS Informational Bulletin  Page 4 
 
 
If Medicare doesnt cover the DMEPOS, but the Medicaid state plan does, Medicaid will pay for 
the DMEPOS, subject to limitations established in the state plan, when the beneficiary obtains 
the item or service from a Medicaid-participating provider.   
 
Medicaid enrollment of Medicare contract suppliers 
 
The state may require Medicare contract suppliers to execute a Medicaid provider agreement and 
enroll in the states Medicaid program in order to submit claims for reimbursement of DMEPOS cost 
sharing, but the state should have a mechanism to ensure that providers who enroll only for that 
purpose are not included in a list of providers available to other beneficiaries.  Alternately, a state may 
utilize a simplified, limited-purpose enrollment process for these providers seeking to enroll in 
Medicaid for the sole purpose of claiming Medicare cost-sharing reimbursement while in compliance 
with the provider screening and enrollment requirements included in the CMCS Informational 
Bulletin issued December 23, 2011  (http://www.medicaid.gov/Federal-Policy-
Guidance/downloads/CIB-12-23-11.pdf).   
 
Regardless of the specific enrollment mechanism chosen, states must enable all Medicare 
contract suppliers who serve QMB or QMB Plus beneficiaries for a CBA, including those who 
are out-of-state, some mechanism by which they can get the state to process their Medicare 
crossover claims for services provided to those beneficiaries, including claims for DMEPOS cost 
sharing. 
 
Additional Information Is Available 
 
For more information about Medicares DMEPOS Competitive Bidding Program, please visit 
http://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/DMEPOS_Toolkit.html. 
 
A Medicare beneficiary who has any questions related to acquiring DMEPOS if he or she lives in a 
CBA, including how to find a contract supplier, should visit www.medicare.gov/supplier or call 1-
800-MEDICARE (1-800-633-4227).  TTY users may call 1-877-486-2048. 
 
If you have any further questions about coordination of Medicare and Medicaid coverage for dual 
eligibles, please contact Cathy Sturgill, Health Insurance Specialist, at 410-786-3345 or 
Cathy.Sturgill@cms.hhs.gov.