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HHS/CMS

RIN: 0938-AN14

Publication ID: Fall 2005

Title: Competitive Acquisition for Certain Durable Medical Equipment (DME), Prosthetics, Orthotics, and Supplies and Residual Issues (CMS-1270-P)
Abstract: Section 302 of the Medicare Modernization Act establishes DME competitive bidding. National competitive bidding will provide a program for using market forces to set Medicare payment amounts. This will also create incentives for suppliers to provide quality items and services while at the same time providing Medicare with reasonable prices for payment. (The statute requires competitive bidding be implemented by January 1, 2007.)
Agency: Department of Health and Human Services(HHS)	Priority: Economically Significant
RIN Status: Previously published in the Unified Agenda	Agenda Stage of Rulemaking: Proposed Rule Stage
Major: Yes	Unfunded Mandates: No
CFR Citation: 42 CFR 414.200 42 CFR 405.502(g) 42 CFR 424.57 42 CFR 410.38
Legal Authority: PL 108-173, MMA

Legal Deadline:

Action	Source	Description	Date
Final	Statutory		01/01/2007

Statement of Need: Section 302 of the Medicare Prescription Drug Improvement, and Modernization Act of 2003 (MMA)(Pub.L. 108-173) authorizes the Secretary to use our competitive acquisition authority, as outlined in the U.S. Code Section 1847(a). Section302 (b)(1) of the Medicare Modernization Act, requires Medicare to replace the current DME payment methodology for certain items with a competitive bidding process to improve the effectiveness of its methodology for setting DME payment amounts. The competitive bidding program is to be phased-in over a 4-year period beginning in 2007. The law requires that competitive bidding be conducted in ten of the largest metropolitan statistical areas in 2007, in 80 of the largest metropolitan statistical areas in 2009, and in additional areas after 2009.

Summary of the Legal Basis: MMA Section 302 (b)(1)

Alternatives: None. Required by MMA.

Anticipated Costs and Benefits: This initiative will result in substantial savings to the Medicare program.

Timetable:

Action	Date	FR Cite
NPRM	11/00/2005
Final Action	08/00/2008

Regulatory Flexibility Analysis Required: Yes	Government Levels Affected: Federal, State
Small Entities Affected: Businesses, Governmental Jurisdictions, Organizations	Federalism: No
Included in the Regulatory Plan: Yes
Agency Contact: Michael Keane Director, Division of DMEPOS Competitive Bidding Department of Health and Human Services Centers for Medicare & Medicaid Services Center for Medicare Management, MS: C5-05-24, 7500 Security Boulevard, Baltimore, MD 21244 Phone:410 786-4495 Email: michael.keane@cms.hhs.gov