10754 Federal Register / Vol. 79, No. 38 / Wednesday, February 26, 2014 / Proposed Rules 

Today’s proposed rule also includes 

clarifying revisions to the language 

regarding primacy applications in 

§ 142.16(q)(2)(ii) to make it more clear 

in the special primacy requirements 

section of the RTCR that systems must 

implement at least one of listed 

additional criteria to qualify for reduced 

monitoring. EPA clearly intended this to 

be the case, as reflected in 

§ 141.854(h)(2) for NCWSs and 

§ 141.855(d) for CWSs, and in the 

preamble to the final RTCR at pages 

10281 and 10282. 

Next, the final rule clarifies situations 

requiring public notification in 

Appendix A to Subpart Q of Part 141 to 

list out all of the possible reporting 

violations under the RTCR that will 

require Tier 3 public notice. EPA clearly 

intended this to be the case, as reflected 

in item (6) in Table 1 to § 141.204 

(Violation Categories and Other 

Situations Requiring a Tier 3 Public 

Notice), which provides that all 

reporting and recordkeeping violations 

under the RTCR require Tier 3 public 

notice. Also, page 10294 of the preamble 

to the final RTCR clearly states that Tier 

3 PN is required for both monitoring 

and reporting violations under the 

RTCR. 

Finally, the final rule clarifies the 

analytical methods table in 

§ 141.852(a)(5) to place the citation 

‘‘Standard Methods Online 9223 B–97’’ 

for the Colilert analytical method in the 

correct column. 

These revisions do not change any 

rule requirements, are consistent with 

the rule requirements as intended by the 

Total Coliform Rule/Distribution System 

Advisory Committee that recommended 

the revisions to the Total Coliform Rule, 

and are intended only to clarify 

requirements and reduce confusion. 

II. Additional Supplementary 

Information 

We are publishing a Direct Final Rule 

to this parallel proposal in the final rule 

section of today’s Federal Register. 

Additional supplementary information 

is available in the Direct Final Rule, 

‘‘National Primary Drinking Water 

Regulation: Minor Corrections to the 

Revisions to the Total Coliform Rule.’’ 

Dated: February 10, 2014. 

Gina McCarthy, 

Administrator. 

[FR Doc. 2014–04171 Filed 2–25–14; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 414 

[CMS–1460–ANPRM] 

RIN 0938–AS05 

Medicare Program; Methodology for 

Adjusting Payment Amounts for 

Certain Durable Medical Equipment, 

Prosthetics, Orthotics, and Supplies 

(DMEPOS) Using Information From 

Competitive Bidding Programs 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Advance notice of proposed 

rulemaking (ANPRM). 

SUMMARY: This advance notice of 

proposed rulemaking (ANPRM) solicits 

public comments on different 

methodologies we may consider using 

with regard to applying information 

from the durable medical equipment, 

prosthetics, orthotics, and supplies 

(DMEPOS) competitive bidding 

programs to adjust Medicare fee 

schedule payment amounts or other 

Medicare payment amounts for 

DMEPOS items and services furnished 

in areas that are not included in these 

competitive bidding programs. In 

addition, we are also requesting 

comments on a different matter 

regarding ideas for potentially changing 

the payment methodologies used under 

the competitive bidding programs for 

certain durable medical equipment and 

enteral nutrition. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on March 28, 2014. 

Customer Service Information: 

Individuals interested in obtaining 

information from the Centers for 

Medicare & Medicaid Services 

concerning current Medicare payment 

policies may call 1–800–MEDICARE 

(633–4227) or visit the Centers for 

Medicare & Medicaid Web site (http:// 

www.cms.gov) or (http://

www.medicare.gov). 

ADDRESSES: In commenting, please refer 

to file code CMS–1460–ANPRM. 

Because of staff and resource 

limitations, we cannot accept comments 

by facsimile (FAX) transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–1460–ANPRM, P.O. Box 8010, 

Baltimore, MD 21244–8010. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–1460– 

ANPRM, Mail Stop C4–26–05, 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

4. By hand or courier. Alternatively, 

you may deliver (by hand or courier) 

your written comments ONLY to the 

following addresses prior to the close of 

the comment period: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue SW., 

Washington, DC 20201 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, call 

telephone number (410) 786–9994 in 

advance to schedule your arrival with 

one of our staff members. 

Comments erroneously mailed to the 

addresses indicated as appropriate for 

hand or courier delivery may be delayed 

and received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Anita Greenberg, (410) 786–4601. 

Karen Jacobs, (410) 786–2173. 

Christopher Molling, (410) 786–6399. 

Hafsa Vahora, (410) 786–7899. 

SUPPLEMENTARY INFORMATION: Inspection 

of Public Comments: All comments 

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Federal Register / Vol. 79, No. 38 / Wednesday, February 26, 2014 / Proposed Rules 10755 

received before the close of the 

comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http://

www.regulations.gov. Follow the search 

instructions on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

A. Adjustments to DMEPOS Fee 

Schedule Amounts 

Medicare pays for most DMEPOS 

furnished after January 1, 1989, 

pursuant to fee schedule methodologies 

set forth in sections 1834 and 1842 of 

the Social Security Act (the Act). 

Specifically, sections 1834(a)(1)(A) and 

(B), and 1834(h)(1)(A) and (B) of the Act 

provide that Medicare payment for these 

items is equal to 80 percent of the lesser 

of the actual charge for the item or the 

fee schedule amount for the item. This 

payment methodology is set forth at 42 

CFR part 414, Subpart D of our 

regulations. Section 1834(h)(1)(A) of the 

Act governs payment for prosthetic 

devices and orthotics and prosthetics, 

while sections 1834(a)(2) through (a)(5) 

and 1834(a)(7) of the Act set forth 

separate payment categories of durable 

medical equipment (DME) and describe 

how the fee schedule for each of the 

following categories is established: 

Inexpensive or other routinely 

purchased items; Items requiring 

frequent and substantial servicing; 

Customized items; Oxygen and oxygen 

equipment; and Other items of DME. 

Section 1842(s) of the Act, and 42 CFR 

part 414, Subpart C of the regulations, 

govern payment on a fee schedule basis 

for parenteral and enteral (PEN) 

nutrients, equipment and supplies. 

Section 1847 of the Act establishes a 

Medicare DMEPOS Competitive Bidding 

Program (‘‘Competitive Bidding 

Program’’). Under the Competitive 

Bidding Program, Medicare sets 

payment amounts for selected DMEPOS 

items and services furnished to 

beneficiaries in competitive bidding 

areas (CBAs) based on bids submitted by 

qualified suppliers and accepted by 

Medicare. For competitively bid items, 

these new payment amounts, referred to 

as ‘‘single payment amounts,’’ replace 

the fee schedule payment amounts. 

Section 1847(b)(5) of the Act provides 

that Medicare payment for these 

competitively bid items and services is 

made on an assignment-related basis 

equal to 80 percent of the applicable 

single payment amount, less any unmet 

Part B deductible. The fee schedule 

methodologies continue to set payment 

amounts for noncompetitively bid 

DMEPOS items and services. 

For DME covered items furnished or 

after January 1, 2011, sections 

1834(a)(1)(F)(ii) and (iii) of the Act 

authorizes the Secretary to use (and 

beginning January 1, 2016, requires use 

of) payment information under the 

competitive bidding program to adjust 

the fee schedule amounts for covered 

items of DME in all non-competitive 

bidding areas, and beginning January 1, 

2016, continue to make such 

adjustments to the fee schedule amounts 

as additional covered items are phased 

in or information is updated as new 

contracts are awarded. Similarly, 

section 1834(h)(1)(H)(ii) of the Act 

authorizes the Secretary to use payment 

information under the competitive 

bidding program to adjust the fee 

schedule amounts for off-the-shelf 

(OTS) orthotics in all non-competitive 

bidding areas beginning January 1, 2011. 

Finally, section 1842(s)(3)(B) of the Act 

provides authority to use payment 

information under the competitive 

bidding program to adjust payment 

amounts otherwise applicable for 

enteral nutrients, supplies, and 

equipment in areas where competitive 

bidding programs are not established for 

these items and services. 

Section 1834(a)(1)(G) of the Act 

requires that the methodology used in 

applying sections 1834(a)(1)(F)(ii) and 

1834(h)(1)(H)(ii) of the Act be 

promulgated through notice and 

comment rulemaking. Section 

1834(a)(1)(G) of the Act also requires 

that we ‘‘consider the costs of items and 

services in areas in which such 

provisions [sections 1834(a)(1)(F)(ii) and 

1834(h)(1)(H)(ii)] would be applied 

compared to the payment rates for such 

items and services in competitive 

acquisition areas.’’ 

The statute requires that the DMEPOS 

fee schedule amounts be based on 

average allowed charges from a base 

period, increased by annual covered 

item update factors set forth in the 

statute. The average allowed charges are 

average payments made in various areas 

of the country under the previous 

reasonable change payment 

methodology that based Medicare 

payments on supplier charges. The rules 

pertaining to the calculation of 

reasonable charges are located at 42 CFR 

part 405, Subpart E of our regulations. 

Under this general methodology, several 

factors were taken into consideration in 

determining the reasonable charge for 

an item. Each supplier’s ‘‘customary 

charge’’ for an item, or the 50th 

percentile of charges for an item over a 

12-month period, was one factor used in 

determining the reasonable charge. The 

‘‘prevailing charge’’ in a local area or 

locality, or the 75th percentile of 

suppliers’ customary charges for the 

item in the locality, was also used in 

determining the reasonable charge. For 

parenteral and enteral nutrition (PEN) 

items and services only, the ‘‘lowest 

charge level’’ (LCL) was also taken into 

consideration and was based on the 

25th percentile of all charges for an item 

in a locality. For the purpose of 

calculating the LCL and prevailing 

charges, a ‘‘locality’’ is defined at 

§ 405.505 and ‘‘may be a State 

(including the District of Columbia, a 

territory, or a Commonwealth), a 

political or economic subdivision of a 

State, or a group of States’’. The 

regulation at § 405.505 further specifies 

that the locality ‘‘should include a cross 

section of the population with respect to 

economic and other characteristics.’’ In 

accordance with regulations at 

§ 405.509, effective for items furnished 

on or after October 1, 1985, an 

additional factor, the ‘‘inflation-indexed 

charge’’ or IIC, was added to the factors 

taken into consideration in determining 

the reasonable charge for an item. The 

IIC is equal to the lowest of the 

customary or prevailing charge from the 

previous year updated by an inflation 

adjustment factor was also used in 

determining the reasonable charge for 

an item. To summarize, the reasonable 

charges for each item that were used to 

calculate the fee schedule amounts are 

equal to the lower of: 

• The supplier’s actual charge on the 

claim; 

• The supplier’s customary charge for 

the item; 

• The prevailing charge in the locality 

for the item; 

• The LCL in the locality for the item, 

if applicable; or 

• The IIC. 

Under the reasonable charge payment 

methodology, it is understood that 

suppliers took all of their costs of 

furnishing various DMEPOS items and 

services in various localities throughout 

the nation into account in setting the 

prices they charges for covered items 

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10756 Federal Register / Vol. 79, No. 38 / Wednesday, February 26, 2014 / Proposed Rules 

and services. Under § 414.104, the fee 

schedule amounts for enteral nutrients, 

supplies, and equipment are national 

fee schedule amounts based on the 

lesser of the reasonable charge from 

1995 or the reasonable charge that 

would have been used in determining 

payment for 2002, updated by the 

covered item update factors. Under 

§ 414.228, the fee schedule amounts for 

OTS orthotics are regional fee schedule 

amounts based on the weighted average 

of the statewide average allowed charges 

for items furnished from July 1, 1986 

through June 30, 1987, updated by the 

covered item update factors. The 

regional fee schedule amounts are 

limited by a national fee schedule 

ceiling and floor. Under § 414.220 and 

§ 414.222, the fee schedule amounts for 

inexpensive or routinely purchased 

DME and DME requiring frequent and 

substantial servicing are statewide fee 

schedule amounts based on the average 

allowed charges for items furnished 

from July 1, 1986 through June 30, 1987, 

updated by the covered item update 

factors, and limited by a national fee 

schedule ceiling and floor. Under 

§ 414.226, the fee schedule amounts for 

oxygen and oxygen equipment are 

statewide fee schedule amounts based 

on the average allowed charges for items 

furnished from January 1, 1986 through 

December 31, 1986, updated by the 

covered item update factors, and limited 

by a national fee schedule ceiling and 

floor. Under § 414.229, the fee schedule 

amounts for capped rental DME are 

statewide fee schedule amounts based 

on the average allowed charges for items 

furnished from July 1, 1986 through 

December 31, 1986, updated by the 

covered item update factors, and limited 

by a national fee schedule ceiling and 

floor. 

DMEPOS competitive bidding pricing 

information is collected using current 

market prices represented by bids 

submitted by suppliers for furnishing 

items and services in certain 

competitive bidding areas (CBAs). In 

accordance with section 1847(a)(1)(B) 

and (D) of the Act, during Rounds 1 and 

2 of the phase in of the competitive 

bidding programs, the CBAs have been 

either entire Metropolitan Statistical 

Areas (MSAs), MSAs excluding areas 

with low population density that are not 

competitive, or, in the case of New 

York, Los Angeles, and Chicago, MSAs 

subdivided into two or more CBAs. In 

accordance with sections 

1834(a)(1)(F)(i), 1834(h)(1)(H)(i), and 

1842(s)(3)(A) of the Act, the competitive 

bidding prices, then, replace the fee 

schedule amounts in those MSAs. 

Currently, the program is active in 100 

MSAs and 109 CBAs. The 109 CBAs 

where competitive bidding has been 

phased in include a wide range of 

different size urban areas and 

surrounding counties. They include one 

CBA (Honolulu, HI) that is not within 

the contiguous Unites States and CBAs 

that range in population size from 

approximately 300 thousand to 10 

million (see Table 1). There are 7 CBAs 

with a population of less than 500,000, 

41 CBAs with a population of more than 

500,000, but less than 1 million, 27 

CBAs with a population of more than 1 

million, but less than 2 million, 19 

CBAs with a population of 2 to 4 

million, and 14 CBAs with a population 

of over 4 million. 

TABLE 1—CBA POPULATION SIZE

CBA Population 

Los Angeles County, CA ..................................................................................................................................................................... 9,862,049 

New York Metro—West Long Island, NY ............................................................................................................................................ 6,688,637 

Dallas-Fort Worth-Arlington, TX .......................................................................................................................................................... 6,447,615 

Chicago Metro—Central, IL ................................................................................................................................................................. 6,225,192 

Philadelphia-Camden-Wilmington, PA–NJ–DE–MD ............................................................................................................................ 5,968,252 

Houston-Sugar Land-Baytown, TX ...................................................................................................................................................... 5,867,489 

Miami-Fort Lauderdale-Pompano Beach, FL ...................................................................................................................................... 5,547,051 

Washington-Arlington-Alexandria, DC–VA–MD–WV ........................................................................................................................... 5,476,241 

Atlanta-Sandy Springs-Marietta, GA ................................................................................................................................................... 5,475,213 

Boston-Cambridge-Quincy, MA–NH .................................................................................................................................................... 4,588,680 

Detroit-Warren-Livonia, MI ................................................................................................................................................................... 4,403,437 

Phoenix-Mesa-Scottsdale, AZ ............................................................................................................................................................. 4,364,094 

San Francisco-Oakland-Fremont, CA ................................................................................................................................................. 4,317,853 

Riverside-San Bernardino-Ontario, CA ............................................................................................................................................... 4,143,113 

Seattle-Tacoma-Bellevue, WA ............................................................................................................................................................. 3,407,848 

New York Metro—North New Jersey, NJ ............................................................................................................................................ 3,390,339 

Minneapolis-St. Paul-Bloomington, MN–WI ........................................................................................................................................ 3,269,814 

San Diego-Carlsbad-San Marcos, CA ................................................................................................................................................. 3,053,793 

New York Metro—Bronx, Manhattan, NY ........................................................................................................................................... 3,026,698 

Orange County, CA ............................................................................................................................................................................. 3,010,759 

New York Metro—South New Jersey, NJ ........................................................................................................................................... 2,977,504 

St. Louis, MO–IL .................................................................................................................................................................................. 2,828,990 

Tampa-St. Petersburg-Clearwater, FL ................................................................................................................................................ 2,747,272 

Baltimore-Towson, MD ........................................................................................................................................................................ 2,690,886 

Denver-Aurora, CO .............................................................................................................................................................................. 2,552,195 

Pittsburgh, PA ...................................................................................................................................................................................... 2,354,957 

Portland-Vancouver-Beaverton, OR–WA ............................................................................................................................................ 2,241,841 

Cincinnati-Middletown, OH–KY–IN ...................................................................................................................................................... 2,171,896 

Sacramento—Arden-Arcade—Roseville, CA ...................................................................................................................................... 2,127,355 

Cleveland-Elyria-Mentor, OH ............................................................................................................................................................... 2,091,286 

Orlando-Kissimmee, FL ....................................................................................................................................................................... 2,082,421 

San Antonio, TX .................................................................................................................................................................................. 2,072,128 

Kansas City, MO–KS ........................................................................................................................................................................... 2,067,585 

Las Vegas-Paradise, NV ..................................................................................................................................................................... 1,902,834 

San Jose-Sunnyvale-Santa Clara, CA ................................................................................................................................................ 1,839,700 

Columbus, OH ..................................................................................................................................................................................... 1,801,848 

Charlotte-Gastonia-Concord, NC–SC .................................................................................................................................................. 1,745,524 

Indianapolis-Carmel, IN ....................................................................................................................................................................... 1,743,658 

Austin-Round Rock, TX ....................................................................................................................................................................... 1,705,075 

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Federal Register / Vol. 79, No. 38 / Wednesday, February 26, 2014 / Proposed Rules 10757 

TABLE 1—CBA POPULATION SIZE—Continued 

CBA Population 

Virginia Beach-Norfolk-Newport News, VA–NC .................................................................................................................................. 1,674,498 

Providence-New Bedford-Fall River, RI–MA ....................................................................................................................................... 1,600,642 

Nashville-Davidson—Murfreesboro—Franklin, TN .............................................................................................................................. 1,582,264 

Milwaukee-Waukesha-West Allis, WI .................................................................................................................................................. 1,559,667 

New York Metro—Suffolk County, NY ................................................................................................................................................ 1,512,224 

Chicago Metro—South, IL ................................................................................................................................................................... 1,446,415 

New York Metro—North New York, NY .............................................................................................................................................. 1,351,732 

Jacksonville, FL ................................................................................................................................................................................... 1,328,144 

Memphis, TN–MS–AR ......................................................................................................................................................................... 1,304,926 

Louisville/Jefferson County, KY–IN ..................................................................................................................................................... 1,258,577 

Richmond, VA ...................................................................................................................................................................................... 1,238,187 

Oklahoma City, OK .............................................................................................................................................................................. 1,227,278 

Hartford-West Hartford-East Hartford, CT ........................................................................................................................................... 1,195,998 

Chicago Metro—North, IL–WI ............................................................................................................................................................. 1,195,559 

New Orleans-Metairie-Kenner, LA ....................................................................................................................................................... 1,189,981 

Birmingham-Hoover, AL ...................................................................................................................................................................... 1,131,070 

Salt Lake City, UT ............................................................................................................................................................................... 1,130,293 

Raleigh-Cary, NC ................................................................................................................................................................................. 1,125,827 

Buffalo-Niagara Falls, NY .................................................................................................................................................................... 1,123,804 

Rochester, NY ..................................................................................................................................................................................... 1,035,566 

Tucson, AZ .......................................................................................................................................................................................... 1,020,200 

Tulsa, OK ............................................................................................................................................................................................. 929,015 

Fresno, CA ........................................................................................................................................................................................... 915,267 

Honolulu, HI ......................................................................................................................................................................................... 907,574 

Bridgeport-Stamford-Norwalk, CT ....................................................................................................................................................... 901,208 

Albuquerque, NM ................................................................................................................................................................................. 857,903 

Albany-Schenectady-Troy, NY ............................................................................................................................................................ 857,592 

Omaha-Council Bluffs, NE–IA ............................................................................................................................................................. 849,517 

New Haven-Milford, CT ....................................................................................................................................................................... 848,006 

Dayton, OH .......................................................................................................................................................................................... 835,063 

Allentown-Bethlehem-Easton, PA–NJ ................................................................................................................................................. 816,012 

Bakersfield, CA .................................................................................................................................................................................... 807,407 

Worcester, MA ..................................................................................................................................................................................... 803,701 

Oxnard-Thousand Oaks-Ventura, CA ................................................................................................................................................. 802,983 

Baton Rouge, LA ................................................................................................................................................................................. 786,947 

Grand Rapids-Wyoming, MI ................................................................................................................................................................ 778,009 

El Paso, TX .......................................................................................................................................................................................... 751,296 

Columbia, SC ....................................................................................................................................................................................... 744,730 

McAllen-Edinburg-Mission, TX ............................................................................................................................................................ 741,152 

Greensboro-High Point, NC ................................................................................................................................................................. 714,765 

Chicago Metro—Indiana, IN ................................................................................................................................................................ 702,458 

Akron, OH ............................................................................................................................................................................................ 699,935 

Knoxville, TN ........................................................................................................................................................................................ 699,247 

Springfield, MA .................................................................................................................................................................................... 698,903 

Bradenton-Sarasota-Venice, FL .......................................................................................................................................................... 688,126 

Little Rock-North Little Rock-Conway, AR .......................................................................................................................................... 685,488 

Poughkeepsie-Newburgh-Middletown, NY .......................................................................................................................................... 677,094 

Stockton, CA ........................................................................................................................................................................................ 674,860 

Toledo, OH .......................................................................................................................................................................................... 672,220 

Charleston-North Charleston-Summerville, SC ................................................................................................................................... 659,191 

Syracuse, NY ....................................................................................................................................................................................... 646,084 

Greenville-Mauldin-Easley, SC ............................................................................................................................................................ 639,617 

Colorado Springs, CO ......................................................................................................................................................................... 626,227 

Wichita, KS .......................................................................................................................................................................................... 612,683 

Boise City-Nampa, ID .......................................................................................................................................................................... 606,376 

Cape Coral-Fort Myers, FL .................................................................................................................................................................. 586,908 

Lakeland-Winter Haven, FL ................................................................................................................................................................. 583,403 

Youngstown-Warren-Boardman, OH–PA ............................................................................................................................................ 562,963 

Scranton—Wilkes-Barre, PA ............................................................................................................................................................... 549,454 

Jackson, MS ........................................................................................................................................................................................ 540,866 

Augusta-Richmond County, GA–SC ................................................................................................................................................... 539,154 

Palm Bay-Melbourne-Titusville, FL ...................................................................................................................................................... 536,357 

Chattanooga, TN–GA .......................................................................................................................................................................... 524,303 

Deltona-Daytona Beach-Ormond Beach, FL ....................................................................................................................................... 495,890 

Visalia-Porterville, CA .......................................................................................................................................................................... 429,668 

Flint, MI ................................................................................................................................................................................................ 424,043 

Asheville, NC ....................................................................................................................................................................................... 412,672 

Beaumont-Port Arthur, TX ................................................................................................................................................................... 378,477 

Ocala, FL ............................................................................................................................................................................................. 328,547 

Huntington-Ashland, WV–KY–OH ....................................................................................................................................................... 285,624 

Source: U.S. Census Bureau, Population Division, 2009 Population Estimates. 

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10758 Federal Register / Vol. 79, No. 38 / Wednesday, February 26, 2014 / Proposed Rules 

Under section 1847(a)(1)(D)(iii) of the 

Act, competitions occurring before 2015 

for items and services other than 

national mail order for diabetic 

supplies, may not include rural areas or 

MSAs with a population of less than 

250,000. Therefore, at this time, we do 

not have competitive bidding pricing 

information from rural areas or smaller 

MSAs. As required by section 

1834(a)(1)(G) of the Act, we must 

specify by regulation the methodology 

to be used for adjusting fee schedule 

amounts using competitive bidding 

information. 

B. Changes to the Payment 

Methodologies and Rules for Durable 

Medical Equipment and Enteral 

Nutrition Furnished Under Competitive 

Bidding Programs 

Section 1847 of the Act provides CMS 

with flexibility and discretion with 

regard to the payment rules for items 

furnished under competitive bidding 

programs. We are considering proposing 

new payment rules for DME and enteral 

nutrients, supplies, and equipment 

furnished under competitive bidding 

programs and request public comments 

on the issue before we decide whether 

to conduct notice and comment 

rulemaking. We believe that bundling 

payment for all items and services 

associated with furnishing enteral 

nutrition or DME into one monthly 

payment based on supplier bids for 

furnishing all items needed for a month 

would greatly simplify the program, 

improve beneficiary access to quality 

items and services, and contribute to 

greater savings associated with 

implementation of the DMEPOS 

competitive bidding program. 

The current Medicare payment rules 

and payment classes for DME mandated 

by section 1834(a) of the Act were 

implemented in 1989, and, depending 

on the item or payment class the item 

falls under, generally allow payment on 

a lump sum purchase basis, a capped 

rental basis, or a continuous monthly 

rental basis where the monthly 

payments are not capped and continue 

for as long as medical necessity and Part 

B coverage continues. The continuous 

monthly rental payment amounts 

include payment for all necessary 

maintenance and servicing of the 

equipment and replacement of all 

essential accessories, whereas payment 

on a purchase or capped rental basis 

results in the need to process and pay 

separately for numerous items that are 

not DME but are related to furnishing 

DME, such as repair of equipment or 

replacement of supplies and accessories 

used with patient-owned equipment. In 

the case of enteral nutrition, there are 

separate billing codes for categories of 

nutrients, three different daily supply 

allowances, feeding tubes, and enteral 

nutrition infusion pumps and IV poles. 

The current payment rules that apply 

to fee schedule DMEPOS items and 

competitive bid items were developed 

in the 1980s to reduce expenditures and 

prevent prolonged rental payments for 

certain DME and enteral infusion 

pumps. However, now that Medicare 

allowed amounts can be established 

under the competitive bidding program 

based on supplier bids to account for 

the average costs of furnishing all 

covered items and services, we believe 

it may be appropriate to modify the 

Medicare payment structure for certain 

DME and enteral nutrition under the 

competitive bidding program by 

requesting a single bid for furnishing all 

related items and services needed on a 

monthly basis (that is, rented 

equipment, replacement of supplies and 

accessories, repair or rented equipment, 

etc.). Bids from suppliers could then be 

used to establish a monthly payment for 

the equipment and all related items and 

services. We believe that capping rentals 

and paying for purchase of equipment 

may no longer be necessary to achieve 

savings for these items and services. 

Suppliers could bid and be awarded 

contracts for meeting all of the 

beneficiary’s needs for each month of 

service, including rental and servicing 

of necessary equipment as well as the 

ongoing replacement of supplies and 

accessories used in conjunction with the 

equipment and any repairs needed for 

the equipment. Such an approach could 

reduce excessive payments for 

furnishing necessary accessories and 

items, provided the continuous monthly 

rental payment amounts were 

reasonable for all the monthly items and 

services that would be furnished. In 

submitting bids under the competitive 

bidding programs, suppliers would take 

a number of things into account to 

develop bids for these monthly items 

and services, such as the costs of all 

items and services needed by the 

beneficiary during each rental month, 

the typical duration of need by 

Medicare beneficiaries for the rented 

items, and the money the supplier saves 

by replacing inventory less frequently if 

the title to the equipment remains with 

the supplier and is not transferred to the 

beneficiary after the capped rental 

period. We believe these changes could 

have a number of positive effects on 

suppliers. The suppliers would no 

longer have to worry about counting 

rental months to determine when they 

might be losing title to certain items in 

their inventory. These changes could 

also benefit patients who would no 

longer have to arrange for repair of 

patient-owned equipment or worry 

about servicing patient-owned 

equipment for which a manufacturer no 

longer makes replacement parts 

available. We believe that suppliers 

would have an incentive to furnish 

more durable and dependable 

equipment to reduce the number of 

service calls they make. If a beneficiary 

owns equipment that needs to be 

serviced, they are responsible for 

locating a supplier and making 

arrangements for the servicing, and the 

beneficiary incurs a separate charge for 

the service. By contrast, if a beneficiary 

is renting equipment, and the rented 

equipment needs to be serviced, the 

beneficiary would simply call the 

supplier of the rented equipment and 

the supplier would be responsible for 

servicing the equipment at no additional 

charge. From a program standpoint, the 

payment rules for capped rental items 

are complicated and onerous to 

administer. The program must keep 

track of separate payment, coverage, 

medical necessity, and other rules for 

hundreds of related codes for 

replacement supplies and accessories 

used with the base equipment as well as 

labor and parts associated with 

repairing patient-owned equipment. In 

addition, claims processing systems 

must count rental months and 

contractors must identify when 

legitimate breaks in continuous use 

occur and can result in the start of new 

capped rental periods. This leads to 

costly and complicated claims 

processing systems and edits for 

processing millions of claims for these 

items and services. 

The current payment rules that allow 

separate payment for supplies and 

accessories used with DME in addition 

to the payment for the DME itself also 

significantly complicate the competitive 

bidding process as special 

grandfathering payment rules must be 

implemented, item weights and 

composite bids must be developed, 

hundreds or thousands of bid amounts 

must be entered, and, in turn, thousands 

of bids and bid amounts must be 

evaluated and screened and single 

payment amounts established. In the 

case of beneficiary-owned wheelchairs, 

the rules regarding when one of the 

hundreds of accessories or component 

must be furnished by a contract supplier 

or non-contract supplier based on 

whether the base wheelchair is 

competitively bid or whether the service 

constitutes a repair of the base 

wheelchair are extremely complicated. 

A simple, straightforward payment 

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system could significantly reduce 

billing and payment errors. 

Under competitive bidding programs 

established in accordance with section 

1847(a) of the Act, we believe CMS has 

discretion to implement different 

payment rules for the items and services 

subject to competitive bidding, 

including certain DME and enteral 

nutrition. Suppliers compete for 

contracts based on bids representing 

their costs for furnishing the DME item 

or enteral nutrition. Regardless of 

whether suppliers compete based on 

submitting one bid for furnishing, for 

example, continuous positive airway 

pressure (CPAP) devices and all related 

supplies, accessories, and services 

needed for one month versus separate, 

piecemeal bids for the various 

individual items, contracts are offered to 

the suppliers that meet all program 

requirements and offer the best value in 

terms of bids submitted. In addition, 

contract suppliers are responsible for 

furnishing what the beneficiary needs 

and this does not change based on how 

the items are billed and paid for under 

Medicare. The supplier costs generally 

do not change based on the method of 

payment used. Therefore, competitive 

bidding provides a means to simplify 

and streamline complicated payment 

rules, resulting in a more efficient 

program. 

By simplifying the payment rules for 

certain DME and enteral nutrition under 

the Competitive Bidding Program, the 

process of competitive bidding could be 

greatly simplified. For example, 

suppliers could submit one bid that 

reflects the costs of furnishing the DME 

and supplies, accessories, and 

maintenance and servicing costs 

associated with furnishing the DME. 

Under competitive bidding, bid limits 

for the DME could be developed based 

on average monthly expenditures per 

beneficiary in an area for the bundle of 

items and services related to furnishing 

the DME (for example, CPAP device 

rental, masks, tubing, humidifier, 

maintenance and servicing). Similarly, 

bid limits for enteral nutrition could be 

developed based on average monthly 

expenditures per beneficiary in an area 

for the bundle of items and services 

related to furnishing enteral nutrition 

(nutrients, supplies, rental of infusion 

pumps and IV poles, and maintenance 

and servicing of equipment). These are 

some possibilities we are exploring with 

regard to modifications that could be 

made to current payment rules and 

methodologies under the CBP in future 

rulemaking. Whether we would proceed 

with proposing this would depend on 

several factors, including issues such as 

administrative burden and feasibility, as 

well as other potential issues raised in 

the public comments we receive. 

II. Questions for Generating Public 

Comments 

A. Methodology for Adjusting Medicare 

Payment Amounts for DMEPOS Items 

and Services Based on Information 

From Competitive Bidding Programs 

We are aware that there continues to 

be a range of aspects to consider in the 

development of the methodology used 

to adjust fee schedule amounts for 

DMEPOS using information from the 

competitive bidding programs. Again, 

we are required by section 1834(a)(1)(G) 

of the Act, to specify by regulation the 

methodology to be used for adjusting fee 

schedule amounts using competitive 

bidding information. However, prior to 

proposing the methodology, we are 

soliciting public comments on a variety 

of topics for CMS to consider. We are 

interested in receiving comments on 

several aspects that we would consider 

in developing a methodology to adjust 

DMEPOS fee schedule amounts or other 

payment amounts in non-competitive 

areas based on DMEPOS competitive 

bidding payment information. We are 

soliciting comments on the following 

list of questions to assist us in 

developing potential proposals 

regarding the methodology for adjusting 

Medicare payment amounts for 

DMEPOS items and services based on 

information from competitive bidding 

programs. 

• Do the costs of furnishing various 

DMEPOS items and services vary based 

on the geographic area in which they are 

furnished? If so, how should the bidding 

information obtained from programs 

established in different regions of the 

nation be grouped together for the 

purpose of adjusting current Medicare 

payment amounts? Should bidding 

information from programs established 

in certain regions of the country be used 

to adjust the payment amounts that 

currently apply to those regions? Are 

there certain areas of the country that 

have unique costs and how should those 

costs be considered? Is there valid and 

reliable information that can be used to 

measure the relative costs of furnishing 

items and services in these unique 

areas? 

• Do the costs of furnishing various 

DMEPOS items and services vary based 

on the size of the market served in terms 

of population and/or distance covered 

or other logistical or demographic 

reasons? Section 1847(a)(1)(D)(iii) of the 

Act prohibits establishing competitive 

bidding programs in MSAs with a 

population of less than 250,000 or in 

areas outside MSAs prior to 2015. Given 

the mandate to use information on the 

payment determined under competitive 

bidding programs to adjust payment 

amounts in areas that are not 

competitive bidding areas by no later 

than January 1, 2016, what alternative 

information, if any, should we rely on 

to determine the relative costs of 

furnishing items and services in these 

areas compared to areas where 

competitive bidding programs have 

already been implemented? 

• How should any future adjustments 

or payment methodology treat payment 

amounts for items that have not been 

included in all competitive bidding 

programs (for example, items such as 

transcutaneous electrical nerve 

stimulation (TENS) devices that have 

only been phased into the nine Round 

1 areas thus far)? 

• Should competitive bidding 

programs be established in all areas of 

the country for a few high volume items 

in order to gather information regarding 

the costs of furnishing DMEPOS items, 

in general, in different areas of the 

country (for example, rural areas as well 

as urban areas)? 

• For payment adjustments or 

competitive bidding programs in rural 

areas, what factors should be used in 

determining a competitive service area 

in terms of Medicare revenue available 

and logistical costs of serving the area? 

Are there ways to determine which rural 

counties should be served by which 

suppliers? 

• What additional factors should be 

considered and why? 

B. Changes to the Payment 

Methodologies and Rules for Durable 

Medical Equipment and Enteral 

Nutrition Furnished Under Competitive 

Bidding Programs 

We are requesting comments on 

testing or phasing in bundled payments 

under competitive bidding programs 

whereby suppliers would submit one 

bundled bid for the delivery of all 

enteral nutrients, supplies, and 

equipment needed for one month by a 

beneficiary as well as one bundled bid 

for furnishing certain DME, including 

all related supplies, accessories, and 

services on a monthly basis. Under such 

an approach, monthly rental payments 

for DME or enteral nutrition equipment 

would no longer reach a cap, while 

separate payment for supplies, 

accessories, enteral nutrients, or 

maintenance and servicing would no 

longer be made. Suppliers would retain 

title to all equipment regardless of 

length of need and beneficiaries would 

be able to switch from supplier to 

supplier on a monthly basis. The 

monthly payments for DME and enteral 

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10760 Federal Register / Vol. 79, No. 38 / Wednesday, February 26, 2014 / Proposed Rules 

nutrition would continue for as long as 

medical necessity and Part B coverage 

continues and the bid limits would be 

based on the average monthly costs per 

beneficiary for the bundle of items and 

services. We are soliciting comments on 

the following list of questions regarding 

proposals we may make to change the 

payment rules and other rules for DME 

and enteral nutrition under the 

DMEPOS competitive bidding program. 

• Are lump sum purchases and 

capped rental payment rules for DME 

and enteral nutrition equipment that 

were implemented to prevent prolonged 

rental payments still needed now that 

monthly payment amounts can be 

established under competitive bidding 

programs for furnishing everything the 

beneficiary needs each month related to 

the covered DME item or enteral 

nutrition? 

• Are there reasons why beneficiaries 

need to own expensive DME or enteral 

nutrition equipment rather than use 

such equipment as needed on a 

continuous monthly basis? 

• Would there be any negative 

impacts associated with continuous 

bundled monthly payments for enteral 

nutrients, supplies, and equipment or 

for certain DME? If so, please explain. 

• Certain DME items such as speech 

generating devices and specialized 

wheelchairs may be adjusted or 

personalized to address individual 

patient needs. Would payment on a 

bundled, continuous rental basis 

adversely impact access to these items 

and services? If so, please provide a 

detailed explanation regarding how this 

method of payment would create a 

negative impact on access to these items 

and services or other items and services 

currently subject to competitive 

bidding. 

• If payment on a capped rental, rentto-own basis or lump sum purchase 

basis is maintained for certain items 

under the competitive bidding program, 

should a requirement be added to the 

regulations specifying that the supplier 

that transfers title to the equipment to 

the beneficiary is responsible for all 

maintenance and servicing of the 

beneficiary-owned equipment for the 

remainder of the equipment’s 

reasonable useful lifetime with no 

additional payment for these services? 

The cost of such a mandatory supplier 

warranty would be factored into the 

bids submitted by the suppliers and the 

payment amounts established based on 

the bids for the items. If such a 

requirement was established, should the 

term maintenance and servicing be 

defined to include all necessary 

maintenance, servicing and repairs that 

are currently paid for separately under 

the Medicare program in addition to any 

additional adjustments or 

personalization of the equipment that 

may be needed once title transfers to the 

patient? We believe these requirements 

may be necessary to safeguard the 

beneficiary and access to necessary 

services related to beneficiary-owned 

DME. 

• Would payment on a bundled, 

continuous rental basis for certain items 

adversely impact the beneficiary’s 

ability to direct their own care, follow 

a plan of care outlined by a physician, 

nurse practitioner or other medical 

provider (for example, occupational, 

physical or speech therapist), or provide 

for appropriate care transitions? If so, 

please explain. 

• What are the advantages or 

disadvantages for beneficiaries and 

suppliers of bundled bidding and 

payments for enteral nutrients, supplies, 

and equipment or DME? 

• Should competitive bidding 

programs utilizing bundled payments be 

established throughout the entire United 

States so that all beneficiaries are 

included under programs where 

suppliers have an obligation to furnish 

covered items and all related items and 

services? 

• Is a continuous bundled monthly 

payment used by commercial payers or 

State Medicaid programs for enteral 

nutrients, supplies, and DME and do 

these approaches inform this potential 

new payment arrangement for Medicare. 

Dated: January 31, 2014. 

Marilyn Tavenner, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: February 4, 2014. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2014–04031 Filed 2–24–14; 4:15 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

6 CFR Chapter I 

8 CFR Chapter I 

19 CFR Chapter I 

33 CFR Chapter I 

44 CFR Chapter I 

46 CFR Chapters I and III 

49 CFR Chapter XII 

[Docket No. DHS–2014–0006] 

Retrospective Review of Existing 

Regulations; Request for Public Input 

AGENCY: Office of the General Counsel, 

DHS. 

ACTION: Notice and request for 

comments. 

SUMMARY: The Department of Homeland 

Security (Department or DHS) is seeking 

comments from the public on specific 

existing significant DHS rules that the 

Department should consider as 

candidates for modification, 

streamlining, expansion, or repeal. 

These efforts will help DHS ensure that 

its regulations contain necessary, 

properly tailored, and up-to-date 

requirements that effectively achieve 

regulatory objectives without imposing 

unwarranted costs. 

DHS is seeking this input pursuant to 

the process identified in DHS’s Final 

Plan for the Retrospective Review of 

Existing Regulations. According to the 

Final Plan, DHS will initiate its 

retrospective review process, on a threeyear cycle, by seeking input from the 

public. The most helpful input will 

identify specific regulations and include 

actionable data supporting the 

nomination of specific regulations for 

retrospective review. 

DATES: Written comments are requested 

on or before March 28, 2014. Late-filed 

comments will be considered to the 

extent practicable. 

ADDRESSES: You may submit comments, 

identified by docket number DHS– 

2014–0006, through the 

Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

FOR FURTHER INFORMATION CONTACT: 

Charlotte Skey, Senior Regulatory 

Economist, Office of the General 

Counsel, U.S. Department of Homeland 

Security. Email: Regulatory.Review@

dhs.gov. 

SUPPLEMENTARY INFORMATION: 

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