On April 2, CMS issued a transmittal containing information pertaining to the competitive bid product categories included in the CY07 DMEPOS Competitive Bidding Program

Healthcare Financial Management, May, 2007

... On April 2, CMS issued a transmittal containing information pertaining to the competitive bid product categories included in the CY07 DMEPOS Competitive Bidding Program.

Currently, Medicare payment for most durable medical equipment, prosthetics, orthotics, and supplies is based on fee schedules. However, section 1847 of the Social Security Act mandates competitive bidding programs to replace the current DMEPOS fee schedule payment amounts for selected items in selected areas. The statute provides that competitive bidding will apply to durable medical equipment meeting the definition of a "covered item" as specified in section 1842(s)(2)(D) of the act. Exceptions may be granted for items and services for which the application of competitive bidding is not likely to result in significant savings or to permit continuity of an existing relationship between a beneficiary and a supplier with respect to furnishing either a rental item or oxygen.

The statute also provides for phasing in competitive bidding beginning in 2007 in 10 of the largest metropolitan statistical areas. The program will be expanded into 70 additional MSAs in 2009 and, after 2009, into additional areas. (Transmittal 1218)