If a beneficiary who resides in a competitive bidding area (CBA) changes from a Medicare Advantage (MA) Plan, either voluntarily or involuntarily, to Medicare fee-for-service (original Medicare), can he/she remain with his/her current managed care supplier even if the supplier is not a contract supplier for the specific competitively bid item the beneficiary receives from the supplier? Will Medicare continue to pay the supplier for the items and services?
Yes. The beneficiary can remain with their current supplier and Medicare may pay for the competitively bid items and services as long as 1) the managed care supplier is Medicare-enrolled, 2) the managed care supplier agrees to become a grandfathered supplier, and 3) the beneficiary was enrolled in the MA Plan at the time the competitive bidding program began. This rule only pertains to those items that are currently being rented to beneficiaries residing in the CBA and to the competitively bid items necessary for the use of the rented item. The supplier must accept assignment on all grandfathered claims. All of the competitive bidding grandfathering rules apply in this situation. For additional information on the grandfathering rules, please review the Grandfathering Information portion of this website.
| 07/30/2014 |
Are competitively bid capped rental items subject to the payment reduction after the 3rd month rental?
Yes. Under competitive bidding, payment for capped rental DME items is made in an amount equal to 10 percent of the single payment amount for each of the first 3 months and 7.5 percent of the single payment amount for the remaining 4 through 13 months of rental. The supplier is required to transfer title to the equipment to the beneficiary after 13 months of continuous use.
| 05/16/2013 |
Can a non-contract supplier furnish competitively bid items to beneficiaries maintaining a permanent residence within a CBA? 
| 05/16/2013 |
Can a supplier choose to grandfather certain beneficiaries and not others?
No. A supplier that chooses to become a grandfathered supplier for an item must continue to provide the item to all beneficiaries who choose to continue receiving the item from the grandfathered supplier.
A grandfathered supplier for oxygen and oxygen equipment must continue furnishing the oxygen and oxygen equipment for any period of medical need for the remainder of the reasonable useful lifetime (five years) of the equipment.
A grandfathered supplier for other rented durable medical equipment (DME) must furnish the item for the remaining months of the rental period, unless the item is no longer medically necessary. For capped rental DME, the grandfathering relationship ends when the ownership is transferred to the beneficiary or the item is no longer medically necessary. For example, if a non-contract supplier grandfathers the rental of a CPAP device, the supplier must continue to rent the item to the beneficiary unless the ownership is transferred to the beneficiary or the item is no longer medically necessary.
After the DMEPOS Competitive Bidding Program is implemented, when a new period of continuous use begins following a break in need of greater than 60 days plus the days remaining in the last paid rental month, the beneficiary must obtain new or additional equipment from a contract supplier.
For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.
| 05/16/2013 |
If a beneficiary has been renting a competitively bid durable medical equipment (DME) item from a supplier that does not become a contract supplier and chooses to switch to a contract supplier at the start of a competitive bidding program, what month should the new contract supplier start billing? When can the non-contract supplier pick up its equipment?
The non-contract supplier must continue to furnish and bill for the rented DME item up to the first "anniversary date" that occurs after the start of the Competitive Bidding Program. (The anniversary date is the day of the month on which the item was first delivered to the beneficiary. Please note that an anniversary date can change if there is a break in service or need of more than 30 days.)
Under no circumstances may the non-contract supplier discontinue services by picking up a medically necessary item prior to the end of a month for which the supplier is eligible to receive a rental payment, even if the last day ends after the start date of the Competitive Bidding Program.
If a beneficiary chooses to switch to a contract supplier, the non-contract supplier and the contract supplier must make arrangements for the pickup of the old equipment and delivery of the new equipment that are suitable to the beneficiary. Such arrangements need to be coordinated between the non-contract and contract suppliers to ensure that the beneficiary has continued access to medically necessary equipment.
The contract supplier can start billing beginning with the first anniversary date that occurs once the Competitive Bidding Program begins.
For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.
| 05/16/2013 |
If a beneficiary who is receiving capped rental durable medical equipment (DME) or oxygen prior to the start of the competitive bidding program moves from a non-competitive bidding area to a competitive bidding area (CBA), is a contract supplier eligible to start a new capped rental period or entitled to receive additional payments for oxygen?
No. Contract suppliers are eligible to begin a new capped rental period or entitled to receive additional payments for oxygen only when a beneficiary is otherwise eligible to receive equipment from a grandfathered supplier. Regulations at 42 CFR 414.408(j) indicate that suppliers can become grandfathered suppliers only for beneficiaries permanently residing in a CBA who were renting DME or oxygen from them prior to the implementation of the program. Beneficiaries not residing in a CBA at the time the program began are not eligible for the grandfathering option. Therefore, the capped rental period for DME does not restart and the contract supplier is not entitled to receive additional oxygen rental payments, as specified in 42 CFR 414.408(h).
Beneficiaries moving into a CBA after the competitive bidding program becomes effective must use a contract supplier to receive competitively bid oxygen and DME. The moving beneficiary must return his/her rented item to the original supplier and receive replacement equipment from a contract supplier. A contract supplier is entitled to receive payments for the remainder of the rental period or until the equipment is no longer medically necessary, whichever occurs first.
The competitive bidding program has not changed the coverage criteria or medical necessity documentation requirements for competitively bid items.
A new detailed written order is required when a beneficiary switches suppliers. Each supplier that bills for an item must, in the event of an audit, be able to produce sufficient information to show that the coverage criteria and related medical necessity documentation requirements are met. The Medicare law requires that the supplier that furnishes the oxygen and oxygen equipment during the 36th month of continuous use must continue to furnish the oxygen and oxygen equipment after the cap for any period of medical need for the remainder of the reasonable useful lifetime of the equipment.
For more information, please view the DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.
| 05/16/2013 |
What will contract suppliers be paid when they furnish oxygen and oxygen equipment or capped rental durable medical equipment (DME) to a beneficiary who transitions to them from a non-contract supplier in the middle of the 36-month or 13-month rental payment period?
If a beneficiary who would otherwise be entitled to obtain oxygen from a grandfathered supplier changes to a contract supplier, the contract supplier will be paid at least 10 monthly payment amounts at the single payment amount regardless of how many months the previous supplier was paid.
For example, for rental agreements in months 2 through 26, the new contract supplier will be paid for the remaining rental months of the period. Contract suppliers assuming rental agreements that are in months 27 or later will receive a minimum of 10 payments regardless of how many months the previous supplier was paid.
If the beneficiary changes to a new contract supplier, the new contract supplier must replace the equipment. If the beneficiary changes from a contract supplier to another contract supplier, the new contract supplier is NOT entitled to a minimum number of months of payment and will be paid the single payment amount for the duration of the rental period not to exceed 36 months.
If a beneficiary who would otherwise be entitled to obtain a capped rental DME item from a grandfathered supplier changes to a contract supplier, a new 13-month rental period begins regardless of how many months the previous supplier was paid. However, rental payments only continue if the item continues to be medically necessary. The contract supplier will be paid the single payment amount. If the beneficiary changes from a contract supplier to another contract supplier, a new rental period does NOT begin, and the new contract supplier will be paid the single payment amount for the duration of the capped rental period.
For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.
| 05/16/2013 |
If a beneficiary’s stationary oxygen equipment reaches the 36 month cap, and a physician later adds a portable oxygen unit to the beneficiary’s order, can the non-contract supplier currently providing the stationary oxygen contents also provide the portable oxygen unit?
Yes, Medicare law requires the supplier (contract or non-contract) who furnished the oxygen in the 36th month to provide oxygen, oxygen equipment, and related supplies and accessories until the beneficiary’s medical need for the oxygen ceases or until the end of the reasonable useful lifetime of the oxygen equipment is reached. Once the five-year reasonable useful lifetime for the stationary oxygen equipment ends, the beneficiary can elect to obtain new oxygen equipment, but they must obtain the replacement equipment from a contract supplier. Once the contract supplier furnishes the new, replacement equipment, a new 36-month rental cap and period of continuous use and a new five-year reasonable useful lifetime for both the stationary and portable oxygen equipment will begin.
| 08/23/2013 |
Prior to the 36th month cap, if a physician prescribes portable oxygen for a beneficiary who is already receiving stationary oxygen equipment from a grandfathered supplier, can the grandfathered supplier also provide the portable oxygen unit?
Yes, the grandfathered supplier must furnish the portable oxygen unit. The Medicare monthly payment amount for oxygen and oxygen equipment includes payment for stationary oxygen equipment, stationary oxygen contents, and portable oxygen contents. An add-on payment for the portable oxygen equipment will be made to the grandfathered supplier.
| 08/23/2013 |
Can a non-contract supplier furnish competitively bid items to beneficiaries maintaining a permanent residence within a CBA?
| 05/16/2013 |
Can a supplier choose to grandfather certain beneficiaries and not others?
No. A supplier that chooses to become a grandfathered supplier for an item must continue to provide the item to all beneficiaries who choose to continue receiving the item from the grandfathered supplier.
A grandfathered supplier for oxygen and oxygen equipment must continue furnishing the oxygen and oxygen equipment for any period of medical need for the remainder of the reasonable useful lifetime (five years) of the equipment.
A grandfathered supplier for other rented durable medical equipment (DME) must furnish the item for the remaining months of the rental period, unless the item is no longer medically necessary. For capped rental DME, the grandfathering relationship ends when the ownership is transferred to the beneficiary or the item is no longer medically necessary. For example, if a non-contract supplier grandfathers the rental of a CPAP device, the supplier must continue to rent the item to the beneficiary unless the ownership is transferred to the beneficiary or the item is no longer medically necessary.
After the DMEPOS Competitive Bidding Program is implemented, when a new period of continuous use begins following a break in need of greater than 60 days plus the days remaining in the last paid rental month, the beneficiary must obtain new or additional equipment from a contract supplier.
For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.
| 05/16/2013 |
Can a supplier of oxygen and oxygen equipment choose to grandfather stationary oxygen and oxygen equipment and not portable oxygen equipment?
No. In accordance with the Medicare law and regulations, the Medicare monthly payment amount for oxygen and oxygen equipment includes payment for stationary oxygen equipment, stationary oxygen contents, and portable oxygen contents. If the supplier is also furnishing portable oxygen equipment to the beneficiary, an add-on payment is made for portable oxygen equipment only. Since payments for portable oxygen contents is included in the monthly payment amount for oxygen and oxygen equipment while payments for portable oxygen equipment is included in the add-on payment, the supplier must be a grandfathered supplier for both stationary and portable oxygen and oxygen equipment in order to be in compliance with the statutorily mandated payment structure for oxygen and oxygen equipment.
| 05/16/2013 |
Does a beneficiary currently receiving oxygen and oxygen equipment prior to the 36-month rental cap or renting a capped rental item (e.g., CPAP device) from a grandfathered supplier who has been inpatient for over 60 days plus the days remaining in the last paid rental month and still needs the oxygen or capped rental item upon returning home have to switch to a contract supplier?
No. This is considered a temporary interruption in billing or a break in service. The beneficiary’s use of the equipment did not cease while he or she was inpatient. Therefore, the medical need never ended. The grandfathered supplier must continue providing the oxygen or rented DME item upon the beneficiary’s discharge from the hospital or facility. This policy applies to any type of break in service (e.g., admission to a nursing facility, enrollment in a managed care plan, travel out of the country, etc.).
| 05/16/2013 |
Following the 5-year or 60-month reasonable useful lifetime for oxygen equipment, the beneficiary can elect to obtain replacement oxygen equipment, which triggers the start of a new 36-month rental payment period. Following the 60th month, will a non-contract supplier be permitted to provide the replacement oxygen equipment, or will the beneficiary need to obtain it from a contract supplier for oxygen and oxygen equipment for the competitive bidding area (CBA)?
The beneficiary must obtain the replacement oxygen equipment from a contract supplier for oxygen and oxygen equipment for the CBA. The non-contract supplier should coordinate with the contract supplier during this transition.
| 05/16/2013 |
If a beneficiary who is receiving capped rental durable medical equipment (DME) or oxygen prior to the start of the competitive bidding program moves from a non-competitive bidding area to a competitive bidding area (CBA), is a contract supplier eligible to start a new capped rental period or entitled to receive additional payments for oxygen?
No. Contract suppliers are eligible to begin a new capped rental period or entitled to receive additional payments for oxygen only when a beneficiary is otherwise eligible to receive equipment from a grandfathered supplier. Regulations at 42 CFR 414.408(j) indicate that suppliers can become grandfathered suppliers only for beneficiaries permanently residing in a CBA who were renting DME or oxygen from them prior to the implementation of the program. Beneficiaries not residing in a CBA at the time the program began are not eligible for the grandfathering option. Therefore, the capped rental period for DME does not restart and the contract supplier is not entitled to receive additional oxygen rental payments, as specified in 42 CFR 414.408(h).
Beneficiaries moving into a CBA after the competitive bidding program becomes effective must use a contract supplier to receive competitively bid oxygen and DME. The moving beneficiary must return his/her rented item to the original supplier and receive replacement equipment from a contract supplier. A contract supplier is entitled to receive payments for the remainder of the rental period or until the equipment is no longer medically necessary, whichever occurs first.
The competitive bidding program has not changed the coverage criteria or medical necessity documentation requirements for competitively bid items.
A new detailed written order is required when a beneficiary switches suppliers. Each supplier that bills for an item must, in the event of an audit, be able to produce sufficient information to show that the coverage criteria and related medical necessity documentation requirements are met. The Medicare law requires that the supplier that furnishes the oxygen and oxygen equipment during the 36th month of continuous use must continue to furnish the oxygen and oxygen equipment after the cap for any period of medical need for the remainder of the reasonable useful lifetime of the equipment.
For more information, please view the DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers fact sheet, which you can find on this website by selecting Educational Information, then Fact Sheets.
| 05/16/2013 |
If a non-contract supplier chooses to become a grandfathered supplier for oxygen and oxygen equipment, will that supplier be permitted to bill for oxygen contents furnished after the 36-month rental cap period or will the patient have to obtain oxygen contents from a contract supplier?
The Medicare law requires that the supplier that furnishes the oxygen and oxygen equipment during the 36th month of continuous use must continue to furnish the oxygen and oxygen equipment after the cap for any period of medical need for the remainder of the reasonable useful lifetime of the equipment. This requirement continues to apply under the DMEPOS Competitive Bidding Program, regardless of the role of the supplier (i.e., contract supplier, grandfathered supplier, or non-contract supplier not electing to become a grandfathered supplier).
It is important to know that this requirement applies even in situations in which the beneficiary relocates on a temporary (i.e., snowbird) or permanent basis outside the supplier’s normal service area. The supplier that furnishes the oxygen or oxygen equipment in the 36th month of continuous use of oxygen and oxygen equipment is prohibited from transferring its ongoing obligations to a contract supplier, regardless of whether it has elected to become a grandfathered supplier and regardless of whether the beneficiary remains in the competitive bidding area (CBA).
| 05/16/2013 |
What will contract suppliers be paid when they furnish oxygen and oxygen equipment or capped rental durable medical equipment (DME) to a beneficiary who transitions to them from a non-contract supplier in the middle of the 36-month or 13-month rental payment period?
If a beneficiary who would otherwise be entitled to obtain oxygen from a grandfathered supplier changes to a contract supplier, the contract supplier will be paid at least 10 monthly payment amounts at the single payment amount regardless of how many months the previous supplier was paid.
For example, for rental agreements in months 2 through 26, the new contract supplier will be paid for the remaining rental months of the period. Contract suppliers assuming rental agreements that are in months 27 or later will receive a minimum of 10 payments regardless of how many months the previous supplier was paid.
If the beneficiary changes to a new contract supplier, the new contract supplier must replace the equipment. If the beneficiary changes from a contract supplier to another contract supplier, the new contract supplier is NOT entitled to a minimum number of months of payment and will be paid the single payment amount for the duration of the rental period not to exceed 36 months.
If a beneficiary who would otherwise be entitled to obtain a capped rental DME item from a grandfathered supplier changes to a contract supplier, a new 13-month rental period begins regardless of how many months the previous supplier was paid. However, rental payments only continue if the item continues to be medically necessary. The contract supplier will be paid the single payment amount. If the beneficiary changes from a contract supplier to another contract supplier, a new rental period does NOT begin, and the new contract supplier will be paid the single payment amount for the duration of the capped rental period.
For more information, please view The DMEPOS Competitive Bidding Program Grandfathering Requirements for Non-Contract Suppliers Fact Sheet.
| 05/16/2013 |
Will a beneficiary who is currently receiving oxygen and oxygen equipment prior to the 36-month rental cap or renting a capped rental item (e.g., CPAP device) from a grandfathered supplier have to obtain his or her equipment from a contract supplier if there is a break in need of greater than 60 days plus the days remaining in the last paid rental month?
Yes. The beneficiary will be required to obtain his or her new equipment from a contract supplier since there is a break in need of greater than 60 days plus the days remaining in the rental month.
A break in need is when the beneficiary’s medical condition changes or improves and the equipment or service is no longer required. In these situations, the period of continuous use of the equipment in the prior rental episode ended and a new period of continuous use and 36- or 13-month rental period may begin as long as the contract supplier submits a new prescription, new medical necessity documentation and a statement describing the reason for the interruption which shows that medical necessity in the prior episode ended.
In all cases where the break in need for oxygen equipment occurs after the supplier has received payment for the 36th month of continuous use, the supplier is responsible for continuing to furnish the oxygen equipment during any period of medical need for the remainder of the reasonable useful lifetime of the equipment. In these situations, the supplier must continue furnishing the equipment, and a new 36-month rental payment period does not begin regardless of the length of the break in medical need and regardless of the number of breaks in medical need.
| 05/16/2013 |