Important Medicare Update on Durable Medical Equipment Prosthetics, Orthotics and Supplies (DMEPOS)

If you are an original Medicare subscriber using durable medical equipment, prosthetics, orthotics and  supplies (DMEPOS) such as diabetic testing kits, there is an important change that may affect you financially.  Effective January 1,2011, Medicare will launch a new program where suppliers of durable medical equipment and supplies in select cities in 9 states must enter into a competitive bid arrangement in order for Medicare to pay for the product.  In time the program will be effective nationwide.

What is this all about?

The Balanced Budget Act of 1997 mandated Medicare to find a system of competitive bidding for durable medical equipment prosthetics orthotics and supplies in an effort to provide quality goods at lesser cost. In 2002 Medicare completed  demonstration studies to test the cost effectiveness and quality of competitive bidding with overwhelmingly positive results.  The study showed that with competition, Medicare subscribers received quality equipment and supplies at reasonable and fair prices.  Beneficiaries saved 20 per cent and remained highly satisfied.  About 77 percent of winning bidders were small business suppliers.

The Medicare Prescription Drug Improvement and Modernization Act of 2003 mandated a gradual phasing in of the competitive bidding process.  The first phase showed 26 per cent projected Medicare savings.  Implementation started in 2008 with notices going to interested bidders and in 2011, the plan will be in full swing in selected cities.


Who are affected?

This only involves original Medicare subscribers.  Medicare subscribers who belong to HMO's are not affected.  Initially the program will take effect only in the following states:

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

How does this affect you?

• If you live in any of these cities and are an original Medicare subscriber, this may mean lower co-insurance when you buy or rent durable medical equipment from a participating provider because the cost of the equipment or supply will be lower.
• However, if you choose to use a non-participating or non-contract Medicare provider,you will be asked to sign an Advanced Beneficiary Notice (ABN) indicating you understand that Medicare does  not usually pay for this service with this provider and you agree to be liable for the entire amount.

What durable medical equipment and supplies are included?

• Oxygen equipment, oxygen and supplies 
• Mail order diabetic supplies 
• Wheelchairs, standard power wheelchairs, scooters and accessories
• Complex rehabilitative power wheelchairs and accessories (Group 2)
• CPAP- continuous positive airway pressure devices, respiratory assist devices and supplies
• Hospital beds and accessories
• Walkers and accessories
• Support surfaces (group 2 mattresses and overlays) in Miami, Fort Lauderdale, and Pompano Beach, FL only 

What do you need to do? 

• Check your zip code to see if you are affected. (This includes purchases or rentals you make while visiting any of the locations above.)
• Get a list of contract Medicare providers in your location to be sure that Medicare will help with these purchases. Use this link Contract Supplier Lists.
• You may also locate a contract provider by zip code through the Medicare website, Medicare.gov
• You may call Medicare at : 1-800-Medicare (1-800-633-4227); TTY users call 1-877-486-2048.