Compliance Corner

Entering Round 2021

Tips from the Competitive Bidding Implementation Contractor for complying with key contract terms

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AS WE IMPLEMENT ROUND 2021 of the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Competitive Bidding Program (CBP), we want to congratulate all of the contract suppliers. We all share a common goal, which is to ensure Medicare beneficiaries receive the off-the-shelf (OTS) back and knee braces prescribed by their physicians and other treating practitioners in a timely manner.

To achieve this goal, each contract supplier must comply with key contract terms under the competitive bidding contract to maintain good standing in the DMEPOS CBP. claim, it is processed on an assigned

Key Contract Terms and Compliance

By looking at each contract obligation closely, we will get a better understanding of the competitive bidding requirements.

Maintain an active Provider Transaction Access Number and state licensing and accreditation requirements. What does this mean? supplier can perform these tasks.

As part of our monitoring program, we routinely review the Provider Enrollment, Chain, and Ownership System enrollment data to identify any contract suppliers that are not complying with program eligibility requirements, such as maintaining an active Medicare billing number, licensing, or accreditation. When an issue is identified, a competitive bidding liaison (CBL) will discuss the issue with the supplier to give them the opportunity to promptly correct the issue. Contract suppliers who are unable to resolve a Medicare supplier enrollment issue will be issued a notice of breach of contract.

Accept assignment on all items under the contract. Medicare payments are based on the single payment amounts (SPAs). Does this status? No, you are not required to change your participating/nonparticipating status. However, you must accept assignment on all CBP items under your contract. If you file a nonassigned basis and payment is based on the SPA. You cannot collect more than the SPA for the item(s) from the beneficiary.

Complete the intake and assessment process, submit claims, coordinate care with the physician, deliver items and provide instruction to the beneficiary/caregiver(s), and ensure all services are performed in compliance with the physician’s order and Medicare rules and guidelines, including subcontracted services. Does this mean my subcontractor cannot work out arrangements with a doctor’s office or the beneficiary for a back brace? That is correct. A subcontractor cannot perform intake and assessment or coordinate care with the physician. Only the contract mean you must change your participating

Provide all contracted items throughout the competitive bidding area (CBA), and do not discriminate against Medicare beneficiaries.

What does this mean? You must provide Medicare beneficiaries the same items that you furnish to other customers. You also must furnish all competitively bid items included in your contract to any beneficiary who maintains a permanent residence in, or visits, a CBA, which includes skilled nursing facilities and nursing facilities.

Furnish a specific brand of an item to avoid an adverse medical outcome for a Medicare beneficiary if ordered by a physician or other treating practitioner. What is the expectation? You must either provide the item, work with the physician for a suitable alternative, or assist the beneficiary with finding a supplier that provides the prescribed brand. If you do not carry the brand and cannot resolve the issue with the physician or by locating another supplier, you must provide the prescribed item, regardless of cost.

Notify CMS of a change of ownership (CHOW). Can a contract be transferred? Yes, CMS may allow the full transfer or transfer of a portion of a competitive bidding contract when there is a CHOW in the company. CMS can approve a contract to be transferred to a new entity as a result of a CHOW, but competitive bidding contracts alone cannot be sold, and doing so would put the contract in breach.

Furnish competitively bid items directly or via subcontractors. What does this mean? Consistent with the Medicare DMEPOS Supplier Standards, contract suppliers may use a subcontractor to perform the following services: purchase of inventory, delivery, and instruction of use of competitively bid items.

As a contract supplier, you may need a subcontractor to assist in providing OTS back and knee braces throughout a CBA. For example, if you are physically located in the southern portion of the CBA, you may choose to use a subcontractor to furnish the northern portion. Even if you use a subcontractor, you must maintain applicable state licensure, if applicable, and be accredited for all of the services provided. A subcontractor that only delivers the item does not need to be accredited. However, if the subcontractor provides more than delivery by giving instructions on the use of the item, then the subcontractor needs to be accredited, unless a professional or pharmacy exemption applies.

Notify CMS within 10 business days of any subcontracting relationship(s) entered into to furnish competitively bid items. How do you notify CMS? You complete the subcontractor statement in Connexion, the DMEPOS CBP’s secure portal. You must disclose the services the subcontractor is performing on your behalf and whether the subcontractor meets the accreditation requirements necessary to furnish these services. If the subcontractor provides more than delivery by setting up or giving instructions on the use of the item, then the subcontractor needs to be accredited, unless a professional or pharmacy exemption applies.

Oversee subcontractors’ performance. Failure for either the contract supplier or subcontractor to comply with the terms may result in breach of contract. Why are you responsible for your subcontractor? You are the contract supplier, and the subcontractor provides services on your behalf. If the subcontractor fails to provide services in compliance with Medicare requirements and the terms of your competitive bidding contract, your contract may be in breach. Therefore, be sure to trust who you are entering into business with before finalizing your subcontracting agreement.

Furnish all items listed on the contract, regardless of capacity. Does this mean you must provide items if you exceeded the estimated capacity you bid? Yes, it does. While there is no guarantee of business under your competitive bidding contract, there are no limits or caps, either. You cannot turn business away; otherwise, you may be in breach of your contract.

Submit a semiannual report (Form C) indicating the manufacturer and model of specific items offered to all customers. Is this really required every six months? Yes, it is. However, there is the option in Connexion to indicate “no changes” if there are none for the items you provide. Also, if you add/change a product within the six-month window of the required submission dates of January 1 to January 15 and July 1 to July 15, this satisfies your Form C requirement for the applicable submission window. For example, if you submit an update in October 2021, then you will have satisfied your submission requirement for January 2022.

Please note, you are only required to provide the manufacturer, make, and model for three Healthcare Common Procedure Coding System (HCPCS) codes for OTS back braces, which are L0457, L0621, and L0650; and for one OTS knee brace, which is L1833. Failure to meet the Form C requirement is a breach of contract. Submissions are made via Connexion, and the information you provide is posted in the Medicare Supplier Directory on Medicare.gov for beneficiaries and referral agents to identify contract suppliers and the brands they carry.

Education and Monitoring

Now that we understand the contract obligations, let’s look more closely at the other tools we use to monitor compliance. To ensure we are meeting our shared goal to ensure Medicare beneficiaries have access to OTS back and knee braces, it is necessary for CMS and the Competitive Bidding Implementation Contractor (CBIC) to monitor contract suppliers to identify potential issues, address the issues, and resolve them through our partnerships, if possible.

CMS and CBIC utilize a variety of methods to ensure contract suppliers remain in compliance with the terms of the contract—complaints, claims data, and routine secret shopper calls. The basis of our monitoring program is providing extensive education to ensure suppliers, beneficiaries, providers, and referral agents understand the DMEPOS CBP rules.

Our complaint monitoring process is one of the best ways to learn if contract suppliers are providing the competitively bid items in the CBAs on their contract. It provides firsthand feedback from beneficiaries and their caregivers or advocates, referral agents, providers, and other suppliers. We investigate every complaint we receive, typically by contacting the complainant, who can be any of the persons listed, and the supplier(s) named; we want to learn all sides of the issue. We often learn there are issues with the documentation in the medical record where the coverage criteria are not met. We also find that suppliers’ customer service representatives may mistakenly provide misinformation; it happens. Like you, our goal is to quickly and thoroughly resolve issues to ensure beneficiaries receive the items they need. Most issues are resolved in less than three or four days—and often in only one or two days. As appropriate, we will work with the contract supplier to ensure any mistakes or misinformation is not repeated. We also utilize claims data and make routine secret shopper calls to ensure contract suppliers are fulfilling their obligations. If an issue is identified—either through claims analysis and/or a routine secret shopper call—the regional CBL calls the contract supplier to review the issue and educate the supplier on its contractual obligations. In addition, CMS has retained a contractor to administer surveys to learn more about key stakeholder and beneficiary experiences and satisfaction with the DMEPOS CBP. Specifically, surveys will be conducted among three key stakeholder groups: beneficiaries, suppliers, and referral agents (e.g., discharge planners, physicians, social workers, case managers, nurses). The survey results will assist CMS in overseeing the DMEPOS CBP and determining if DMEPOS CBP changes are required. Future updates about the competitive bidding surveys can be found on CMS.gov.

Lastly, CMS performs health status monitoring with real-time claims analyses. Health status reports for DMEPOS CBP contract periods are updated on a quarterly basis and published on CMS.gov. Each product category file includes a written summary of health status monitoring results and graphical displays of beneficiaries’ health status and their access to competitively bid items. The data is derived from claims for Medicare populations in each CBA and a corresponding “comparator” region that is similar to the CBA.

We hope you find this information useful as you enter Round 2021. Please do not hesitate to contact the CBIC at 877/577-5331 or your regional CBL for assistance. We are here to help you navigate the next three years as a Round 2021 contract supplier.

Elaine Hensley is the chief competitive bidding liaison at the Competitive Bidding Implementation Contractor.

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