On July 11, 2018, CMS announced that the process for recompeting contracts with suppliers currently in effect under the durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) Competitive Bidding Program (CBP) continues to be delayed with no specific launch date planned. CMS indicated, however, that the agency continues to back the CBP and intends to initiate a new bid process sometime in the future. In the meantime, the current contracts for the DMEPOS CBP will expire on December 31, 2018. Beginning on January 1, 2019, and until new contracts are awarded under the DMEPOS CBP, Medicare beneficiaries may receive covered DMEPOS items from any Medicare enrolled DMEPOS supplier. In a new proposed rulemaking governing payment for end stage renal disease services, renal dialysis services and DMEPOS, CMS-1691-P (Proposed Rule), CMS is proposing to keep the current competitively bid rates in place, subject to a CPI-U update; however, all enrolled suppliers would be eligible to receive payment at the rates. CMS also proposed several changes to the DMEPOS CBP in the Proposed Rule.

Specifically, in the Proposed Rule, CMS is proposing changes to the DMEPOS CBP and DMEPOS Fee Schedule amounts, including the following:

• Implement lead item pricing (i.e., pricing based on the maximum winning bid) within each DMEPOS CBP product category;
• Revise the definition of “composite bid” to mean the bid submitted by the supplier for the lead item in the product category; 
• Establish a new method for establishing single payment amounts (SPAs) under the DMEPOS CBP using maximum winning bids (as opposed to the current methodology that relies on the median price offered by the winning suppliers); and
• Establish three temporary fee schedule adjustment methodologies, each applicable to a different area in which the items or services are furnished:
  • For items and services furnished in former competitive bidding areas (CBAs), the fee schedule would be based on the SPAs in effect in the CBA on the last day before the DMEPOS CBP contract periods of performance ended, increased by the projected percentage change in the Consumer Price Index for Urban Consumers (CPI-U) for the 12-month period on the date after the contract periods ended (for example, January 1, 2019). This would effectively keep the current rates in place with a CPI-U update.
  • For items and services subject to the DMEPOS CBP that are furnished in rural and non-contiguous non-CBAs, the fee schedule amounts would be based on a blend of 50 percent of the adjusted fee schedule amounts and 50 percent of the unadjusted fee schedule amount, through December 31, 2020.
  • For items and services furnished in non-CBAs that are not rural or non-contiguous areas with dates of service between January 1, 2019 and December 31, 2020, the fee schedule amount would equal 100 percent of the adjusted payment amount.

A number of facets of the Proposed Rule may be subject to challenges. Comments on the Proposed Rule are due by September 10, 2018. The Proposed Rule is available here, and CMS’s announcement is available here.