(Medicare Claims Processing Manual)

Medicare Claims Processing Manual  Chapter 36  Competitive Bidding  Table of Contents (Rev. 11427, 05-20-22)  Transmittals for Chapter 36  01 - Foreword  10 - Background  10.1 - Competitive Bidding Implementation Contractor (CBIC)  10.2 - Definitions  20 - DMEPOS Competitive Bidding Process  20.1 - Items Subject to Competitive Bidding  20.2 - Competitive Bidding Areas (CBAs)  20.3 - No Administrative or Judicial Review  20.4 - Eligibility Requirements to Submit a Bid  20.5 - Becoming a Contract Supplier  20.5.1 - Small Suppliers and Networks  20.5.2 - Skilled Nursing Facilities (SNFs) and Nursing Facilities (NFs)  20.5.3 - Home Health Agencies  20.5.3.1 - Mail -Order Suppliers for Diabetic Supplies  20.5.4 - Items Furnished on a Mail Order Basis  20.5.4.1 - Mail -Order Suppliers for Diabetic Supplies  20.6 - Noncontract Suppliers  20.6.1 - Special Rules for Certain Rented Durable Medical Equipment (DME), Oxygen and Oxygen Equipment (Grandfathered Suppliers and Items)  20.6.1.1 - Requirements for Grandfathered Suppliers  20.6.1.1.1 - Eligibility  20.6.1.1.2 - Servicing Current Beneficiaries  20.6.1.1.3 - Notification to Beneficiaries by Suppliers that Choose to Become Grandfathered Suppliers  20.6.1.1.4 - Notification to Beneficiaries for Suppliers that Choose Not to Become Grandfathered Suppliers  20.6.2 - New Period of Continuous Use  20.6.3 - Picking Up Equipment  20.6.4 - Transfer of Title for Oxygen Equipment and Capped Rental DME  20.6.5 - Capped Rental DME Furnished Prior to January 1, 2006  20.7 - Use of Advanced Beneficiary Notice (ABNs)  30 - Contract Supplier Responsibilities  30.1 -  Compliance with Laws and Regulations  30.2 -  Requirement to Maintain Medicare Billing Privileges and Accreditation  30.3 -  Servicing the Entire Geographic Area of a CBA  30.4 -  Prescr iption for Particular Brand, Item, or Mode of Delivery  30.5 -  No Discrimination Against Beneficiaries  30.6 -  Quarterly Reports  30.7 -  Reporting Change of Ownership (CHOW)  30.8 -  Submission of Claims  30.9 -  Breach of Contract  30.10 -  Request for Reconsideration 40 - Payment Rules  40.1 -  Single Payment Amount  40.2 -  Conditions for Payment  40.3 -  Payment for Grandfathered Items Furnished During the Initial Competitive Bidding Contract Period/Program  40.3.1 -  Payment Ca tegories  40.3.1.1 -  Inexpensive or Routinely Purchased Items  40.3.1.2 -  Items Requiring Frequent and Substantial Servicing 40.3.1.3 -  Oxygen and Oxygen Equipment  40.3.1.4 -  Other DME or Capped Rental Items  40.3.2 -  Payment for Grandfathered Items Furnished During Subsequent Competitive Bidding Contract Periods/Programs  40.3.2.1  Pa yment for Capped Rental Items  40.3.2.2  Payment for Inexpensive or Routinely Purchased  40.3.3 -  Accessories and Supplies for Grandfathered Items  40.4 -  Payment for Rental of Inexpensive or Routinely Purchased DME  40.5 -  Payment for Oxygen and Oxygen Equipment  40.5.1 -  Change in Suppliers for Oxygen and Oxygen Equipment  40.6 -  Payment for Capped Rental DME Items  40.6.1 -  Change in Suppliers for Capped Rental DME Items  40.7 -  Payment for Purchased Equipment  40.8 -  Payment for Repair and Replacement of Beneficiary -Owned Equipment  40.9 -  Payment for Enteral Nutrition Equipment  40.9.1 -  Maintenance and Servicing of Enteral Nutrition Equipment  40.10 -  Traveling Beneficiaries  40.10.1 -  Traveling Beneficiaries and Transfer of Title of Oxygen Equipment or Capped Rental Items  40.11 -  Billing Procedures Related to Advance Beneficiary Notice (ABN) Upgrades under the Competitive Bidding Program  40.12 -  Billing Procedures Related to Downcoding under the Competitive Bidding Program  50 - Special Billing Instructions for the DMEPOS Competitive Bidding Program 50.1 -  Electronic Submission of Claims and Mandatory Assignment  50.2 -  New Modifiers for DMEPOS Competitive Bidding Billing  50.3 -  Billing for Items in Multiple Product Categories  50.4 -  Claims Jurisdiction and Billing Procedures for Traveling Beneficiaries  50.5 -  Claims for DMEPOS Items Furnished to a Beneficiary by a Skilled Nursing Facility (SNF) or a Nursing Facility (NF)  50.6 -  Billing for Mail Order Items  50.7 -  Claims Submitted for Physicians/Practitioners Who Furnish Competitively Bid Items  50.8 -  Billing for Oxygen and Oxygen Equipment  50.9 -  Billing for Capped  Rental DME Items  50.9.1 -  Certificates of Medical Necessity (CMN) and Capped Rental DME Billing  50.10 -  Claims Submitted for Hospitals Who Furnish Competitively Bid Items  50.11 -  Claims Submitted for Medicare Beneficiaries Previously Enrolled in a Medicare Advantage Plan  50.12 -  Claims for Repairs and Replacements  50.13 -  Billing for Oxygen Contents to Suppliers After the 36th Month Rental Cap 50.14 -  Purchased Accessories & Supplies for Use With Grandfathered Equipment  50.15 -  Hospitals Providing Walkers and Related Accessories to Their Patients on the Date of Discharge  50.16 -  Exception for Wheelchair Accessories Furnished with Non- Competitively Bid Wheelchair Base Equipment    01 - Foreword  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  42 CFR 411.15 and 414  This ch apter provides guidance on the Medicare DMEPOS Competitive Bidding Program and general instructions on billing and claims processing for DMEPOS items subject to this program.  General instructions on billing and claims processing for DMEPOS items, except a s noted in this chapter, are in Chapter 20 of this manual.  The payment rules for DMEPOS items specified in Chapter 20 of this manual generally apply to DMEPOS competitively bid items and services unless otherwise noted in this chapter.  Coverage requireme nts in the Medicare Benefit Policy Manual and National Coverage Determinations manual will continue to apply to the Medicare DMEPOS Competitive Bidding Program unless noted otherwise in this chapter.  The instructions in this chapter are applicable to items and services subject to the Medicare DMEPOS Competitive Bidding Program unless otherwise noted.  They pertain to Medicare contractors, including, but not limited to:  Medicare Administrative Contractors (MACs), Program Safeguard Contractors (PSCs), a nd the DMEPOS Competitive Bidding Implementation Contractor (CBIC).  These instructions are also applicable to DMEPOS suppliers.  10 - Background  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  Section 1834 of the Social Security Act (the Act), as added by section 4062 of the Omnibus Budget Reconciliation Act of 1987 (OBRA 87), Public Law 100 -203, provides for implementation of a fee schedule methodology for most durable medical equipment (DME), prosthetic devices, and orthotic de vices furnished after January 1, 1989.  The Medicare DMEPOS Competitive Bidding Program is required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the MMA) (Pub. L. 108- 173), which amended section 1847 of the Act.  Section 1847 of the Act, as amended, requires that competitive bidding programs be established and implemented in areas throughout the United States.  In general, the statute requires that the Secretary implement a competitive bidding program that replaces the current DMEPOS fee schedule methodology for determining payment rates for certain DMEPOS items in competitive bidding areas.  This fee schedule methodology will continue to be used for payment of Medicare covered DMEPOS non- competitively bid items or services.   The payment rates for DMEPOS competitively bid items are determined by using bids submitted by DMEPOS suppliers.  The intent is to improve the methodology for setting DMEPOS payment amounts.  These payments will reduce beneficiary out -of-pocket expenses and save the Medicare program money while ensuring beneficiary access to quality DMEPOS items and services from qualified suppliers.   The Medicare DMEPOS Competitive Bidding Program is being phased in, beginning in 2007 with 10 metropolitan statistical are as (MSAs) for certain DMEPOS items.  The program will be expanded into 70 additional MSAs in 2009, and then into additional areas (MSAs or other defined areas) after calendar year 2009.   10.1 - Competitive Bidding Implementation Contractor (CBIC) (Rev. 1502; Issued:  05 -09-08; Effective/Implementation Date:  06 -09-08)  Section 1847 of the Act authorizes CMS to contract with a Competitive Bidding Implementation Contractor (CBIC), to conduct certain functions relating to the administration of the Medicare DME POS Competitive Bidding Program.  These functions include: preparing the request for bids (RFB); performing preliminary bid evaluations; and ensuring that suppliers meet all applicable financial and quality standards.  In addition, the CBIC supports CMSs efforts to conduct an educational program for beneficiaries, suppliers and referral agents.  The CBIC also assists CMS and its contractors in monitoring the program's effectiveness, access and quality.  The CBICs Web site, at http://www.dmecompetitivebid.com, contains important and up- to-date information on the Medicare DMEPOS Competitive Bidding Program.  10.2 - Definitions  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  Advance Beneficiary Notice (ABN)  is a written form provided by the supplier and signed by the Medicare beneficiary in which the beneficiary agrees to pay out of pocket for charges not paid for by Medicare.   Bid means an offer to furnish an item in a competitive bidding area (CBA) for a particular price and time period that includes, where appropriate, any services that are directly related to the furnishing of the item.   Competitive Bidding Area (CBA)  is the area determined by CMS, wherein suppliers are awarded contracts to furnish certain DMEPOS items to Medicare beneficiaries who obtain competitive bid items in the CBA.   Competitive bidding program  means a program under the Medicare DMEPOS Competitive Bidding Program established within a designated CBA for a specified product category and contract period.  Composite bid  means the sum of a suppliers weighted bids for all items within a product category within a CBA for purposes of allowing a comparison across bidding suppliers.  Contract supplier  means an entity that is awarded a contract by CMS to furnish items under a competitive bidding program.  Grandfathered item  means any one of the following categories of items for which payment is made on a rental basis prior to the implementation of a competitive bidding program and for which payment is made after implementation of a competitive bidding program to a grandfathered supplier that continues to furnish the items in accordance with 42 CFR 414.408(j):  (1)  Inexpensive or routinely purchased items furnished on a rental basis;  (2)  Items requiring frequent and substantial servicing;   (3)  Oxygen and oxygen equipment (not including oxygen contents, supplies or accessories furnished for use in conjunction with beneficiary -owned equipment);   (4)  Ca pped rental items furnished on a rental basis.  Grandfathered supplier  means a noncontract supplier that elects to continue to furnish grandfathered items to beneficiaries in a CBA to whom the supplier had furnished the items prior to implementation of the competitive bidding program.  The beneficiary must elect to continue to receive the item from the grandfathered supplier.   Item  means a product included in a competitive bidding program that is identified by a HCPCS code, which may be specified for competitive bidding (for example, a product when it is furnished through mai l order), or a combination of codes and/or modifiers.  An item also includes the services directly related to the furnishing of that product to the beneficiary, including caregiver training and follow -up, suppliers shipping charges, maintaining rented equipment in proper order, education, delivery, set -up and retrieval as appropriate.   Item weight  is a number assigned to an item based on national allowed services for that item when compared to other items in the same product category.   Mail order refers to  items ordered remotely (i.e., by phone, email, internet, or mail) and delivered to the beneficiarys residence by common carriers (e.g., U.S. Postal Service, Federal Express, United Parcel Service) and does not include items obtained by beneficiaries from  local supplier storefronts.