Overview for SHINE Counselors

1. Overview for SHINE Counselors Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program National Mail Order Program for Diabetic Supplies

2. Part 1 Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program

3. What is the DMEPOS Competitive Bidding Program? • Effective July 1, 2013 the competitive bidding program will change the amount Medicare pays for DMEPOS in an effort to save money and ensure a beneficiary obtains quality equipment, supplies and services. • Medicare contracted suppliers will provide DMEPOS for 8 specific item categories. • A Medicare beneficiary living in a Competitive Bidding Area (CBA) must purchase or rent competitive bid items from a Medicare Contract Supplier for coverage by Medicare. • DMEPOS suppliers submitted bids to participate in this program. Contracts were awarded to suppliers who offered the most competitive prices and met Medicare's financial and eligibility standards. • Medicare will pay Contract Suppliers a flat rate for each supply (Medicare approved amount). • Medicare payments for DMEPOS will be reduced by approximately 45%, thus reducing costs for the beneficiary.

4. Who is Affected? • This affects a beneficiary who uses Original Medicare as primary insurance coverage and lives in a CBA or obtains items while visiting a CBA. • The CBA includes most counties in Massachusetts with the exception of Barnstable, Berkshire, Dukes and Nantucket counties. • A beneficiary enrolled in a Medicare Advantage Plan is NOT affected and will continue to use suppliers designated by the plan.

5. What are the Competitive Bid Items? • Oxygen, oxygen equipment and supplies • Enteral nutrients, equipment supplies • Continuous Positive Airway Pressure (CPAP) devices and Respiratory Assist Devices (RADs), and related supplies and accessories • Hospital beds and related accessories • Walkers and related accessories • Support Surfaces (Group 2 mattresses and overlays) • Standard (power and manual) wheelchairs, scooters, and related accessories • Negative pressure wound therapy pumps and related supplies and accessories

6. Examples of Non-Competitive Bid Items • Canes and Crutches • Prostheses • Ostomy Supplies • Commodes • Shower Chairs

7. Supplier Information Contract Suppliers Must • Provide competitive bid items • File claims with Medicare for payment of competitive bid items • Charge a beneficiary no more than the Medicare approved amount (accept assignment) Non-Contract Suppliers Must • Provide the beneficiary with an Advance Beneficiary Notice (ABN) Non-Contract Suppliers will NOT file claims with Medicare. If a beneficiary signs an ABN, the beneficiary will be responsible for the entire payment. If the ABN is not signed, the beneficiary is not responsible.

8. Who is a Contract Supplier? • Check the DMEPOS Supplier Locator tool which offers a search by zip code. www.medicare.gov/supplier • Call 1-800-MEDICARE (1-800-633-4227) TTY users (1-877-486-2048)

9. What does a beneficiary pay? After a beneficiary pays the annual Part B deductible of $147: • Medicare pays 80% of Medicare approved amount • Beneficiary pays remaining 20% coinsurance Contract Suppliers cannot bill more than these amounts! Any cases of overpayment or fraud should be reported to: • 1-800-MEDICARE (1-800-633-4227) • Fraud Hotline of the HHS Office of Inspector General (1-800-447-8477) • SMP, Senior Medicare Patrol (1-800-892-0890)

10. Renting competitive bid equipment If the current supplier becomes a Contract Supplier no action is required. If the current supplier does NOT become a Contract Supplier: • Can choose to be a “grandfathered supplier” and is required to: • Notify the beneficiary • Continue to provide coverage until the rental agreement ends • Coordinate with a Contract Supplier to ensure the beneficiary gets new equipment without any lapse in coverage

11. Renting competitive bid equipment (continued) • Can choose NOT to be a “grandfathered supplier” and is required to: • Take the equipment back after providing proper notification: • 30 day written notice • Follow up contact 10 days and 2 days prior to picking item • Coordinate the delivery of new equipment with a Contract Supplier to ensure no lapse in coverage The beneficiary has the right to continue using a “grandfathered supplier” until the rental agreement ends OR can switch to a Contract Supplier.

12. Part 2 National Mail Order Program for Diabetic Testing Supplies

13. National Mail Order Program for Diabetic Testing Supplies • New program effective July 1, 2013. A beneficiary who wishes to have diabetic supplies delivered to the home will need to use a Medicare National Mail-Order Contract Supplier. • Local stores (pharmacies or storefront suppliers) that accept assignment will also provide diabetic testing supplies at the same low price, but cannot deliver them to a beneficiary’s home. • A beneficiary enrolled in a Medicare Advantage Plan will continue to use the plan’s suppliers. Example: A box of 100 Lancets Current fee schedule: $11.72 July 1stMedicare approved amount: $1.65 As of July 1st , If a beneficiary uses a localsupplier or a retail pharmacy that accepts assignment: Medicare will pay 80% of the Medicare approved amount ($1.32) Beneficiary would be responsible for the 20% coinsurance ($0.33)

14. Diabetic Testing Supplies • Blood sugar test strips • Lancet devices and lancets • Replacement Batteries for Glucose Monitors (NOT Glucose Monitors) • Glucose control solutions for checking accuracy of testing equipment and test strips Items NOT affected: All diabetic supplies covered by Medicare Part D, i.e. syringes, needles, and inhaled insulin devices.

15. How it works National Mail-Order Contract Suppliers & Local Stores (pharmacies or storefront suppliers) that accept assignment Cannot charge more than the Medicare approved amount for diabetic supplies Local Stores (pharmacies or storefront suppliers) that are non-participating suppliers (do NOT accept assignment) Can provide diabetic supplies to a beneficiary, but can charge more than the Medicare approved amount for an item. The claim is still sent to Medicare; however, Medicare will only pay 80% of the Medicare approved amount. The beneficiary would be responsible for the 20% coinsurance and any costs above the Medicare approved amount. Example: Judy has only Original Medicare. On July 1st she purchases a box of 50 diabetic test strips from Paymore Pharmacy. Paymore is a non-participating provider so does not accept Medicare assignment and charges $40. Medicare paid 80% of Medicare approved amount $8.33 ($10.41 x .80) and Judy paid $31.67. Had Judy gone to a pharmacy that accepted Medicare assignment, she would have paid only $2.08 ($10.41 x .20) for her test strips.

16. To find a low cost Supplier • Check the DMEPOS Supplier Locator tool which offers a search by zip code. www.medicare.gov/supplier • Call 1-800-MEDICARE (1-800-633-4227) TTY users (1-877-486-2048)

17. Points to Remember and Next Steps • For additional information on both programs consult www.medicare.gov/supplier, http://www.dmecompetitivebid.comor 1-800-MEDICARE. • A beneficiary may need to change suppliers for Medicare coverage of DMEPOS competitive bid items and diabetic supplies. • Medicare Advantage Plans are not affected. If a member has questions, contact the plan directly. A beneficiary should: • See if the beneficiary's zip code is in a CBA • Check if the needed item is part of the competitive bidding program in the area • For competitive bid items, find the Contract Suppliers that can provide the needed item in the CBA • For diabetic supplies, find the National Mail-Order Contract Suppliers and the local stores (pharmacies or storefront suppliers) that accept assignment.