Certain Medicare Beneficiaries May Need to Find New Suppliers of their Oxygen Equipment and Other Respiratory Devices

Beginning January 1, 2011, if you live in or travel to one of the nine metropolitan areas listed below, you may need to find a new supplier to provide your oxygen and oxygen equipment, continuous positive airway pressure device, respiratory assist device, related supplies and accessories or other selected products referred to as “durable medical equipment (DME)” under a new Medicare program called “competitive bidding.”

• Charlotte-Gastonia-Concord (North Carolina and South Carolina)
• Cincinnati-Middletown (Ohio-Kentucky and Indiana)
• Cleveland-Elyria-Mentor (Ohio)
• Dallas-Fort Worth-Arlington (Texas)
• Kansas City (Missouri and Kansas)
• Miami-Fort  Lauderdale-Pompano Beach (Florida)
• Orlando (Florida)
• Pittsburgh (Pennsylvania)
• Riverside-San Bernardino-Ontario (California)

By now, if you are one of those beneficiaries living in these areas, you may have already received something in the mail directly from the Medicare program as part of its educational campaign to make sure every Medicare beneficiary has all the information he or she needs to make an informed decision as part of the new program. If not, you should receive a mailing shortly.

What is Competitive Bidding?

The Medicare program is changing the way they pay certain suppliers of oxygen equipment and other rented items of DME.  It is called “competitive bidding”.  What that means is the Medicare program used bids from suppliers in the nine selected areas based on competitive prices in the local marketplace as a way to lower costs.  Because Medicare beneficiaries pay 20 percent coinsurance on what these types of equipment cost the program, you will benefit in the way of savings because the cost of the item will be lower than what the Medicare program pays now.  The law requires Medicare to do this.

At the start of next year you will need to obtain your oxygen, oxygen equipment or other applicable items and supplies from one of the contract suppliers in these nine areas where you live or travel who won a bid unless your current supplier decides to become a “grandfathered supplier.”

What is a Grandfathered Supplier?

The supplier who is furnishing oxygen equipment and/or other rented DME to you and other Medicare beneficiaries in these areas at the time the competitive bidding program begins can decide to become a “grandfathered” supplier. 

Basically, that means your current supplier agrees to accept the payment amount that has been set under this new competitive program and is willing to continue serving all Medicare beneficiaries in the affected area to whom it was furnishing equipment at the time the new program begins.  Your current supplier is required to send you a notice by November 17, 2010 if it wants to be a “grandfathered supplier.” 

Do I Have Choices?

Yes.  You can either stay with your current supplier if it decides to become a “grandfathered supplier”, or you have the choice to pick a new supplier from the list of contract suppliers who won the bids in these nine areas.  To find a new supplier or to view the list of suppliers in your area, visit the CMS link: http://www.cms.gov/DMEPOSCompetitiveBid/01A2_Contract_Supplier_Lists.asp.

How Can I Find Out More About the Program?

If you want to find more information about the competitive bidding program, an excellent resource can be found by visiting www.medicare.gov (under “Resource Locator” select “Medical Equipment and Supplier”).  Once you have selected the site, to the right is a link to more information about the competitive bidding program.  Click on that and it will provide you with a list of questions and answers about the program that you may find useful.

You can also call 1-800-MEDICARE (TTY users should call 1-977-496-2048) for assistance.  Or, you may want to visit the local offices of the various partner groups for help in finding a Medicare contract supplier, such as your State Health Insurance and Assistance Program, Area Office on Aging and a number of community organizations that can provide information on the program.

Is the Competitive Bidding Program Really Going to Happen this January?

The Medicare program is definitely moving forward to make sure the competitive bidding program starts on January 1, 2011.  But, you should be aware that many interested parties, including the providers of home care equipment and supplies and even members of Congress, have expressed significant concerns to the folks who run the Medicare program about whether the program can deliver all that it promises.  Some believe that there are a lot of flaws in how the Medicare program went about obtaining the bids for the new contracts and whether the new contract suppliers can really provide all the services they bid on.  Many have asked the Medicare program to hold off on moving forward until some of these issues can be addressed more fully.

Nevertheless, it will most likely take some act of Congress to stop the program at this point in time.  Members of the House of Representatives have introduced a bill to repeal the competitive bidding program.  But, in order for it to move through the legislative process, the Senate has to introduce a companion bill and that has not happened yet. The AARC along with other groups have supported the Congressional legislation calling for the program’s repeal.

If the competitive bidding program begins on January 1, 2011 and then is later repealed and you are one of the Medicare beneficiaries in the designated areas, you will no doubt hear a lot about it, especially from the Medicare program.  However, we will keep you informed through this website if additional information becomes available.  As of now, however, you should be prepared for the changes that are coming.