(Medicare Claims Processing Manual)

Any communication with CMS regarding the change of ownership must be in writing and mailed to the appropriate address designated in the contract.  30.8 - Submission of Claims  (Rev. 1502; Issued:  05-09- 08; Effectiv e/Implementation Date:  06 -09-08)  A contract supplier must submit Medicare claims for payment in accordance with rules in this chapter.   30.9 - Breach of Contract  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  Pursuant to 42 CFR 414.422(f)(1), any violation of the terms of the contract by the contract supplier, including a failure to comply with licensing and accreditation requirements, constitutes a breach of contract.   If a supplier breaches its contract, CMS may take one or mo re of the following actions:  (i) Require the contract supplier to submit a corrective action plan (CAP);  (ii) Suspend the contract suppliers contract;  (iii) Terminate the contract;   (iv) Preclude the contract supplier from future participation in the competitive bidding program;  (v) Revoke the supplier number of the contract supplier; or  (vi) Avail itself of other remedies allowed by law.   CMS will notify the DME MACs in the event that a CMS action results in a termination or suspension of the contract.  30.10 - Request for Reconsideration  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  CMS will notify the contract supplier before it takes a breach of contract action and will notify the supplier at that time of how it can ask for reconsideration of any breach of contract determination.   40 - Payment Rules  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  A single payment amount is established for each competitive bid item for each CBA based on the bids submitted and accepted for that item.  All payment for competitive bidding items is made on an assignment related basis.  The payment basis for an item is 80 percent of the applicable single payment amount for the CBA in which the beneficiary maintains a permanent residence, less any unmet Part B deductible described in 1833(b) of the Act.  If an item that is included in a competitive bidding program is furnished to a beneficiary who does not maintain a permanent residence in a CBA, the payment basis for the item is 80 percent of the lesser of the actual charge of the item, or the applicable fee schedule amount for the item.  The single payment amount calculated for each item under each competitive bidding program is paid for the duration of the competitive bidding program and will not be adjusted by any update factor.  Payment for items or services furnished by a supplier under the Medicare Secondary Payer rules will be calculated in accordance with the established related payment rules.   40.1 - Single Payment Amount  (Rev. 1532, Is sued: 06 -11-08, Effective: 07-01-08, Implementation: 07-07-08)  The single payment amount for each competitively bid item in each CBA is based on the bids submitted and accepted for that item.  Only bids from qualified suppliers (those that met all quality and financial standards and eligibility and accreditation requirements) are considered in setting the single payment amount.  The single payment amount for an item furnished under the competitive bidding program is equal to the median of the bids submitte d for that item by qualified suppliers whose composite bids for the product category are equal to or below the pivotal bid for that product category.  The single amount is determined by CMS and remains in effect for the duration of a contract period and is not adjusted for inflation.  A listing of the single payment amounts will be posted at the CBIC Web site at http://www.dmecompetitivebid.com. See section 100.5 of chapter 23 of the Claims Processing Manual for instructions regarding adjustments to the single payment amounts as a result of changes in the HCPCS.  40.2 - Conditions for Payment  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  Unless an exception is allowed (see section 20.6), Medicare does not make payment for any DMEPOS items and services subject to competitive bidding unless such items are furnished by a contract supplier for that item.   40.3 - Payment for Grandfathered Items Furnished During the Initial Competitive Bidding Contract Period/Program  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  Payment for a grandfathered item(s) furnished during the initial competitive bidding contract period (i.e., when the item is bid for the first time in  a CBA) varies depending on the payment category to which the item(s) belongs (See section 40.3.1 of this chapter).  In all cases, assignment of claims is mandatory, and suppliers must accept the Medicare allowed payment amount as payment in full.  40.3.1 - Payment Categories (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  40.3.1.1 - Inexpensive or Routinely Purchased Items  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  The standard provisions for determi ning the payment amount for inexpensive or routinely purchased items in section 30.1 of chapter 20 of this manual continue to apply when these items are furnished by grandfathered suppliers.  Payment for the items is based on the lower of the actual charge or fee schedule amount for each item.  40.3.1.2 - Items Requiring Frequent and Substantial Servicing  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  When items requiring frequent and substantial servicing are furnished by a grandfathered supplier, payment is based on the single payment amount established in accordance with 42 CFR 414.408(a)(1) for the CBA in which the beneficiary maintains a permanent residence.   40.3.1.3 - Oxygen and Oxygen Equipment  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  When oxygen and oxygen equipment are furnished by a grandfathered supplier, payment is based on the single payment amount established in accordance with 42 CFR 414.408(a)(1) for the CBA in which the beneficiary maintains a permanent residence.   40.3.1.4 - Other DME or Capped Rental Items  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  The standard payment provisions in section 30.5 of chapter 20 of this manual continue to apply when capped rental DME items are furnished by grandfathered suppliers.  Payment for the items is ba sed on the lower of the actual charge or fee schedule amount for each item.   40.3.2 - Payment for Grandfathered Items Furnished During Subsequent Compe titive Bidding Contract Periods/Programs  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  Payment for any grandfathered item furnished during a subsequent competitive bidding contract period (i.e., when an item is re -bid in a CBA a nd a new single payment amount is established) is based on the single payment amount for the round of competitive bidding during which the item is furnished and for the CBA in which the beneficiary maintains a permanent residence.   40.3.2.1  Payment for C apped Rental Items  (Rev.  3593, Issued: 08- 17-16, Effective: 10- 01-16, Implementation: 10- 03-16)  For rented, grandfathered equipment in the capped rental payment class (e.g., CPAP device or manual wheelchair), after the rental payment cap for the grandfathered equipment and after the rental payment cap on the accessory (when applicable, e.g., elevating leg rests) is reached, the beneficiary must obtain covered accessories and supplies (e.g., CPAP masks) only from a contract supplier.  The supplier of the grandfathered equipment is no longer permitted to furnish the covered accessories and supplies once the rental payment cap on the grandfathered equipment is reached, with the exception of completing the rental period for accessories whose first month rental began during the rental period for the grandfathered equipment (e.g., the addition of elevating leg rests during the third rental month for a grandfathered manual wheelchair).   40.3.2.2  Payment for Inexpensive or Routinely Purchased Items (Rev.  3593, Issued: 08- 17-16, Effective: 10- 01-16, Implementation: 10- 03-16)  For rented, grandfathered equipment in the inexpensive or routinely purchased payment class, after the total payments for the rented, grandfathered equipment (e.g., folding walker) rea ch the purchase fee schedule amount for the grandfathered equipment and after the rental payment cap on the accessory (when applicable), the beneficiary must obtain covered accessories (e.g., seat attachment) and supplies only from a contract supplier.  The supplier of the grandfathered equipment is no longer permitted to furnish the covered accessories and supplies once the capped rental payment cap on the equipment is reached, with the exception of completing the rental period for accessories whose first month rental began during the rental period for the grandfathered equipment.  40.3.3 - Accessories and Supplies for Grandfathered Items  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  Accessories and supplies that are used in conjunction with and are necessary for the effective use of a grandfathered item may be furnished by the same grandfathered supplier that furnishes the grandfathered item.  Examples of medically necessary accessori es and supplies used in conjunction with DMEPOS items include tubes, hoses, and masks with respiratory equipment and administration sets with infusion pumps.  Payment for these items to a grandfathered supplier is based on the single payment amount if the item is a competitive bid item for the CBA in which the beneficiary maintains a permanent residence (see 36.40.1 of chapter 20 in this manual).  If the item is not a competitive bidding item, payment will be made in accordance with the standard payment rules.   40.4 - Payment for Rental of Inexpensive or Routinely Purchased DME  (Rev. 1532, Issued: 06- 11-08, Effective: 07- 01-08, Implementation: 07- 07-08)  The monthly rental payment amounts for inexpensive or routinely purchased DME (identified using HCPCS modifier RR) are equal to 10 percent of the single payment amount established for purchase of the item.   40.5 - Payment for Oxygen and Oxygen Equipment  (Rev. 1532, Issued: 06- 11-08, Effective: 07- 01-08, Implementation: 07- 07-08)  The monthly payment amounts for oxygen and oxygen equipment are equal to the single payment amounts established for the following classes of items:    Stationary oxygen equipment (including stationary oxygen concentrators) and oxygen contents (stationary and portable)    Portable equipme nt only (gaseous or liquid tanks)    Oxygen generating portable equipment (OGPE) only (used in lieu of traditional portable oxygen equipment/tanks)    Stationary oxygen contents (for beneficiary -owned stationary liquid or gaseous equipment)    Portable oxygen contents (for beneficiary -owned portable liquid or gaseous equipment)   In cases where a supplier is furnishing both stationary oxygen contents and portable oxygen contents, the supplier is paid both the single payment amount for stationary oxygen contents and the single payment amount for portable oxygen contents.  The payment amounts for purchase of supplies and accessories used with beneficiary -owned oxygen equipment are equal to the single payment amounts established for the supply or accessory.   40.5.1 - Change in Suppliers for Oxygen and Oxygen Equipment  (Rev.  3953, Issued: 01- 19-18, Effective: 07 -01-18, Implementation: 07- 02-18)  The following rules apply when the beneficiary switches from one supplier of oxygen and oxygen equipment to another supplie r after the beginning of each round of competitive bidding:   Noncontract supplier to contract supplier   In general, monthly payment amounts may not exceed a period of continuous use of longer than 36 months.  However, if the beneficiary switches from a noncontract supplier to a contract supplier before the end of the 36- month period, at least 10 monthly payment amounts would be made to a contract supplier that begins furnishing oxygen and oxygen equipment in these situations provided that medical necessity for oxygen continues.