By: Medicare’s DMEPOS Competitive Bidding Round 2021 is now in full effect as of January 1, 2021. (See previous articles about what CBID Round 2021 is all about).
DME providers either participated in the process with hopes of being awarded a bid, or they abstained from doing so. Of those who participated, with Medicare’s recent bid winner announcements, bid winners were happy and bid losers, well not so much – as only those providers awarded a contract could service a Medicare Part B beneficiary for competitively bid product(s) for patients residing in competitive bid areas (“CBA”).
Now what? What are the options for the relationships between ‘winners’ and ‘losers’ in moving forward, if any? Let’s briefly discuss subcontracting.
Bid Winners – the happier group. These suppliers were awarded contracts for at least one of the two bid categories (OTS knee and OTS lumbar orthosis), and are contractually obligated to service a Medicare Part B beneficiary that presents to it for a competitively bid item if the patient resides in the CBA the DME provider was awarded. Some of these suppliers may wish to work with other DME companies that have not been awarded bids to assist in the process. What types of relationships are permissible?
Bid Losers – the group lesser pleased with the competitive bidding results. What are such providers options, if any, in working with bid winners?
Medicare’s DMEPOS supplier standards make it clear that a Medicare Part B enrolled provider is limited to subcontracting the following: (i) purchase of inventory; (ii) delivery an instruction on use of Medicare-covered items; and (iii) maintenance and repair of rented equipment.
As such, a bid winner can only compliantly subcontract those above services to other DME providers as it concerns the contracted supplier’s obligations under the competitive bid program.
In addition to subcontracting options, providers need to take care to pay close attention to marketing regulations concerning relationships between bid-winning and non-bid winning providers. Contracted suppliers may be tempted to reach out to those providers who have previously supplied patients with now competitively bid products, as those providers can no longer do so if such patients reside in a CBA. All such providers should proceed with caution in that regard, as various state and Federal regulations prohibit a party from compensating another for the referral of patients for healthcare services.
Whether it’s a permissible subcontracting relationship, or a proposed marketing endeavor, both bid winning and bid losing DME providers need to ensure they are aware of what the regulations permit and prohibit to keep their relationships with Medicare in good standing!