Are You Ready for Competitive Bidding?

Round 2021 of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) competitive bidding program opens July 16! Are you ready?

Our partners at AAHomecare have gathered what you need to begin bidding. The complete information is available at the DME CBP website.

In case you are in a rush, we have gathered the top tips to prepare you for bidding.

1. Know the basics of bidding.

Why does this program exist? In 2003, Congress implemented a statute under its Medicare Prescription Drug, Improvement, and Modernization Act (MMA) that requires Medicare to replace its existing fee schedule for selected DMEPOS products with a competitive bidding process.

In short, this web-based process creates competition among HME providers. Their bids are evaluated by eligibility, financial health, and bid price. Then, Medicare awards contracts based on these criteria.

2. Know the numbers involved.

The DME CBP website offers a bid calculator, a preliminary tool to help bidders understand single payment amounts in a particular product category based on the lead item’s bid. In addition, it estimates how these amounts compare to Medicare’s current rates.

3. Know the prerequisites before you bid.

Before bidding, you must meet several prerequisites:

  • Enrolled in Medicare and notified Medicare when adding or removing products and services;
  • Accredited by a Centers for Medicare and Medicaid Services organization for the items in your product category;
  • Received applicable state licenses to furnish items in your product category; and
  • Obtained a bid surety bond of $50,000 and provided the secretary with proof of this bond.

4. Know the price to know the program.

The competitive bidding program uses a special pricing process. So, let’s discuss the key terms.

bid is an offer to provide an item for a particular price and time, including fees for the item’s service and delivery.

The bid ceiling is the limit against which providers can bid for the lead item in a product category.

bona fide bid involves prices that are sufficient to ensure that lead and non-lead items are at the highest pricing level.

Lead item pricing involves submitting a bid for the lead item in a particular product category. This is the item with the highest Medicare allowed charges in the previous year.

The maximum winning bid is the highest bid amount by providers in the winning range.

Best of luck in Round 2021! Our highly-skilled HME billing team is here to answer your questions. Contact us to discuss competitive bidding, medical billing, and more.

Tune into our blog each week. Finally, don’t forget to follow us on LinkedIn and Twitter for the latest HME industry news and trends.

Prochant is the nation’s leading HME billing and process outsourcing company. Our highly-skilled team helps providers become more profitable by outsourcing or enhancing front- and back-office processes. We rapidly implement changes and proactively monitor metrics to ensure client success. Headquartered in Charlotte, North Carolina, we work with top medical equipment providers and health systems.