(Medicare Claims Processing Manual)

 Network members can only join one network per product category per CBA.   Only small suppliers that are unable independently to serve the entire geographic area of a CBA may join the network.   Each member of the  network must sign a certification statement that must be included as part of the networks bid application.  The certification statement must specify that the supplier joined the network because it is unable independently to furnish all of the items in the product category for which the network is submitting a bid to beneficiaries throughout the entire geographic area of the CBA.    The network cannot be anticompetitive.  Any suspected cases of Federal antitrust violations are referred to the Department of J ustice for review.    For bid evaluation purposes, a networks combined total market share for each product category cannot exceed 20 percent of the Medicare demand for that product category in the CBA at the time of bidding.  However, once a network receive s a contract, the network may expand and exceed the 20 percent limit on market share.    Network members may not bid independently or as a member of another network for the same product category for which the network submits a bid in the same CBA.  A supplie r can join different networks for different product categories or in different CBAs.    If a network is awarded a contract, each member of the contracted network will submit its own Medicare claims and will be paid directly by Medicare for products and servi ces it furnishes under the Medicare DMEPOS Competitive Bidding Program.   20.5.2 - Skilled Nursing Facilities (SNFs) and Nursing Facilities (NFs)  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  The Medicare DMEPOS Competitive Bidding Program applies to SNFs and NFs located in a CBA to the extent their residents receive competitively bid items under Medicare Part B.  Unlike most suppliers, SNFs and NFs have the option to bid for, and be awarded, contracts to be specialty suppli ers that only furnish competitively bid items to their own residents.  SNFs and NFs may elect to submit a bid as a specialty supplier by indicating on the RFB that they will only furnish competitive bid items to their own residents.  Any SNF or NF awarded a contract would be paid the single payment amount for those items.  SNFs and NFs that elect to be specialty suppliers may not furnish competitively bid items and services to Medicare beneficiaries outside their facilities for purposes of Medicare payment .  If a SNF or NF is not awarded a contract, it must use a contract supplier for the CBA to furnish competitively bid items to its residents.  SNFs and NFs can also become regular contract suppliers that furnish competitively bid items to beneficiaries thr oughout a CBA.   If a SNF or NF is not a contract supplier (either a specialty contract supplier or a regular contract supplier), it must use a contract supplier for its CBA to furnish competitively bid items to its residents.   20.5.3 - Home Health Agencies  (Rev. 1532, Issued: 06- 11-08, Effective: 07- 01-08, Implementation: 07- 07-08)  Home health agencies must submit a bid and be awarded a contract for the DMEPOS Competitive Bidding Program in order to furnish competitively bid items directly to Medicare beneficiaries who maintain a permanent residence in a CBA.  If a home health agency is not awarded a contract to furnish competitively bid items, then they must use a contract supplier for these items.    20.5.3.1 - Mail -Order Suppliers for Diabetic Supplie s (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  Medicare beneficiaries who maintain a permanent residence in a CBA in which CMS has implemented a competitive bidding program for mail order diabetic supplies may purchase their diabetic testing supplies from:   A mail order contract supplier for the CBA in which the beneficiary resides; or    Any enrolled Medicare supplier if the diabetic testing supplies are furnished at a storefront and are not subject to a competitive bidding prog ram established for non- mail order diabetic supplies.  Mail order contract suppliers will be reimbursed at the single payment amount for mail order diabetic supplies for the CBA in which the beneficiary maintains a permanent residence.  In situations where  a competitive bidding program has not been established for non- mail order diabetic supplies, noncontract suppliers that do not furnish items through mail order will be reimbursed at the fee schedule amount for the state in which the beneficiary maintains a permanent residence.  Medicare payment will not be made to noncontract suppliers that furnish mail order diabetic testing supplies to Medicare beneficiaries residing in a CBA.   Mail order diabetic suppliers must use the HCPCS modifier KL on each claim to  indicate that the item was furnished on a mail order basis.  The modifier must be used for both competitive bidding and non- competitive bidding mail order diabetic supplies.  Suppliers that furnish mail order diabetic items that fail to use the HCPCS modifier KL on the claim may be subject to penalties under of the False Claims Act.   20.5.4 - Items Furnished on a Mail Order Basis  (Rev. 1532, Issued: 06- 11-08, Effective: 07- 01-08, Implementation: 07- 07-08)  A Medicare beneficiary who maintains a permanent r esidence in a CBA for which we have done competitive bidding for mail order items may purchase their mail order items from: (1) a mail order contract supplier for that CBA; or (2) a noncontract supplier, if the item is purchased at a storefront.  In situat ions where the beneficiary elects to obtain the item from a local storefront or from a local supplier via a mode of delivery other than mail order and the item is not subject to a competitive bidding program established for non -mail order items, the beneficiary may obtain the item from any Medicare enrolled supplier.   20.5.4.1 - Mail -Order Suppliers for Diabetic Supplies  (Rev. 1532, Issued: 06- 11-08, Effective: 07- 01-08, Implementation: 07- 07-08)  Medicare beneficiaries who maintain a permanent residence in  a CBA in which CMS has implemented a competitive bidding program for mail order diabetic supplies may purchase their diabetic testing supplies from:   A mail order contract supplier for the CBA in which the beneficiary resides; or    Any enrolled Medicare s upplier if the diabetic testing supplies are furnished at a storefront and are not subject to a competitive bidding program established for non- mail order diabetic supplies.  Mail order contract suppliers will be reimbursed at the single payment amount for  mail order diabetic supplies for the CBA in which the beneficiary maintains a permanent residence.  In situations where a competitive bidding program has not been established for non- mail order diabetic supplies, noncontract suppliers that do not furnish items through mail order will be reimbursed at the fee schedule amount for the state in which the beneficiary maintains a permanent residence.  Medicare payment will not be made to noncontract suppliers that furnish mail order diabetic testing supplies to Medicare beneficiaries residing in a CBA.   Mail order diabetic suppliers must use the HCPCS modifier KL on each claim to indicate that the item was furnished on a mail order basis.  The modifier must be used for both competitive bidding and non- competitive  bidding mail order diabetic supplies.  Suppliers that furnish mail order diabetic items that fail to use the HCPCS modifier KL on the claim may be subject to penalties under of the False Claims Act.   20.6 - Noncontract Suppliers  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  Noncontract suppliers that furnish competitively bid items in a CBA are not eligible for Medicare payment for the competitively bid items for that CBA unless one or more of the following exceptions appli es:   Suppliers of Grandfathered DME  - Beneficiaries who are receiving oxygen and oxygen equipment or rented DME at the time the competitive bidding program becomes effective may elect to continue to receive these items from a noncontract supplier if the supplier is willing to continue furnishing these items. See section 20.6.1 of this chapter for more information on grandfathering.    Repairs/Replacement  - Beneficiaries who maintain a permanent residence in a CBA may go to any Medicare- enrolled supplier (cont ract or noncontract supplier) for repairs or replacement parts for beneficiary owned items.  Labor to repair equipment is not subject to competitive bidding and, therefore, will be paid in accordance with Medicares general payment rules.  Payment for part s that are not competitively bid items and that are needed to repair a beneficiary -owned item will also be paid in accordance with these rules.  Payment for replacement parts that are part of the competitive bidding program for the areas in which the benef iciary resides would be paid at the single payment amount.  Unlike repairs, beneficiaries must obtain replacements of certain base equipment they own (e.g., wheelchairs or hospital beds) from a contract supplier, when the base equipment must be replaced in its entirety, rather than replacement parts for the repair of the base equipment.  A contract supplier is required to service all rented items included in its contract.    Physicians and Other Practitioners  Who are Enrolled Medicare DMEPOS Suppliers -  Physi cians and treating practitioners have the option to furnish certain types of competitively bid items in a CBA to their own patients without submitting a bid and being a selected as a contract supplier, provided the following requirements are met:   o The item s are limited to crutches, canes, walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME.   o The items must be billed using a billing number assigned to the physician, the treating practitioner or a group practice to which the physician or treating practitioner has reassigned the right to receive Medicare payment for competitive bid items.   Physicians and treating practitioners who do not to become contract suppliers may only provide the bid items identified above to thei r own patients and will not be allowed to act as contract suppliers to provide bid items to beneficiaries for purposes of Medicare payment.   The physician or treating practitioner will be paid the single payment amount when the furnished item is a competitive bid item and the beneficiary maintains a permanent residence in a CBA.    Physical Therapists and Occupational Therapists in Private Practice Who are Enrolled Medicare DMEPOS Suppliers -- Physical therapists and occupational therapists in private practice have the option to furnish certain types of competitively bid items to their own patients without submitting a bid and being a selected as a contract supplier, provided the following requirements are met:   o The only competitive bid items they may f urnish without becoming a contract supplier are OTS orthotics.  o The items must be furnished only to their own patients as part of the physical or occupational therapy service.   Physical and occupational therapists in private practice who do not to become contract suppliers may only provide competitive bid OTS orthotics to their own patients and will not be allowed to act as contract suppliers for purposes of Medicare payment.   The physical or occupational therapist will be paid at the single payment amount when the furnished item is a competitive bid item and the beneficiary maintains a permanent residence in a CBA.    Medicare Secondary Payer -  If a Medicare beneficiary is required under his or her primary insurance policy to use a supplier that is a noncontr act supplier, Medicare may make a secondary payment to a noncontract Medicare -enrolled supplier for competitive bid items. The supplier must have a valid NSC# and be eligible to receive secondary payments. The amount paid to the supplier will be calculated in accordance with established Medicare secondary payment rules.  If none of the exceptions above apply, then the noncontract supplier is responsible for notifying the beneficiary that it is not a contract supplier for the competitive bidding item in the CBA, and the beneficiary must go to a contract supplier for that item in order for Medicare to make payment for the item.  CMS has a supplier locator tool in order to assist beneficiaries and suppliers in finding contract suppliers.  The supplier locator tool can be found at www.medicare.gov.  Beneficiaries may also call 1 -800-Medicare to obtain information about contract suppliers.  20.6.1 - Special Rules for Certain Rented Durable Medical Equipment (DME), Oxygen and  Oxygen Equipment (Grandfathered Suppliers and Items)  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  Suppliers that were furnishing certain rented DME, or oxygen and oxygen equipment at the time a competitive bidding program begins in a CBA, may become grandfathered suppliers by continuing to furnish these items to the Medicare beneficiaries who have been receiving these items, even if the suppliers do not become contract suppliers for these items in the CBA. Grandfathered items must be any of the following:   (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) Capped rental items furnished on a rental basis.  20.6.1.1 - Requirements for Grandfathered Suppliers  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)