Centers for Medicare & Medicaid Services (CMS)

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Topical Resources

OIG Study Finds Inappropriate Medicare Billing for Diabetes Test Strips

A report released in August by the Office of Inspector General found that in 2011, Medicare inappropriately paid $6 million for diabetic testing strip claims billed without the appropriate diagnosis code or overlapping with an inpatient hospital or skilled nursing facility stay, and over $425 million for claims with characteristics of questionable billing. These claims represented over ten percent of diabetes testing strip suppliers participating in Medicare at the time. The study also found that implementation of competitive bidding in certain areas reduced questionable billing practices, as compared to areas without competitive bidding. OIG recommended that CMS increase monitoring and provider and beneficiary education to further reduce questionable billing. OIG also recommended that CMS take action on claims and suppliers with questionable billing.

PROVISION OF DIABETIC TESTING SUPPLIES: DMEPOS Competitive Bidding Enters Round 2 – July 1, 2013

Starting on July 1st, Medicare beneficiaries must use a Medicare Contract mail order supplier for their diabetic testing supplies. This is also the day that Competitive Bidding Round 2 goes into effect.  Someone must physically walk into the supplier’s location and pick up the beneficiary’s diabetic testing supplies starting July 1, 2013; the supplier cannot deliver the supplies.

Program Overview

The Medicare Modernization Act of 2003 (MMA) established requirements for a new Competitive Bidding Program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). Under the program, DMEPOS suppliers competed to become Medicare contract suppliers by submitting bids to furnish certain items in competitive bidding areas, and the Centers for Medicare & Medicaid Services (CMS) awarded contracts to certain suppliers based on certain criteria.  

Under the MMA, the DMEPOS Competitive Bidding Program was to be phased in so that competition under the program would first occur in 10 areas in 2007. CMS conducted the Round One competition in 10 areas and for 10 DMEPOS product categories, and implemented the program on July 1, 2008. The program lasted for two weeks before being halted as a result of wide spread industry push back on problems with the program’s implementation.  Congress passed an emergency bill, The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) that temporarily delayed the program, terminated the Round One contracts that were in effect and made other limited changes.

As required by MIPPA, CMS conducted the supplier competition again in 2009, referring to it as the Round One Rebid. On January 1, 2011, CMS launched the first phase of Medicare's competitive bidding program in nine different areas of the country for nine product categories.

MIPPA also required the competition for Round Two to occur in 2011 in 70 additional metropolitan statistical areas (MSAs) and authorized competition for national mail order items and services after 2010. The Affordable Care Act of 2010 expanded the number of Round Two MSAs from 70 to 91 areas and mandates that all areas of the country are subject either to DMEPOS competitive bidding or payment rate adjustments using competitively bid rates by 2016.

CMS is required by law to recompete contracts for the DMEPOS Competitive Bidding Program at least once every three years. The Round One Rebid contract period for all product categories except mail-order diabetic supplies expires on December 31, 2013. CMS is conducting the Round One Recompete in the same competitive bidding areas as the Round One Rebid.

Diabetic Supplies – National Mail-Order Program

A national competition to furnish diabetic testing supplies that are delivered to beneficiaries’ residences occurred at the same time as the Round 2 competition. Suppliers were awarded contracts to furnish mail-order diabetic testing supplies to Medicare beneficiaries in all parts of the United States, including the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa. Beneficiaries may choose to pick up diabetic testing supplies in person from retail pharmacy locations or other local supplier storefronts. With the July 1, 2013 implementation of the program, only contract suppliers will be reimbursed by Medicare for providing diabetic testing supplies delivered to beneficiaries’ residences. If the supplies are shipped or delivered by any means to the beneficiary’s home, including facility-based residents, then the supplier that furnished the supplies must be a contract supplier. The only diabetic supplies not included in the program are those that are purchased directly by a beneficiary or caregiver by physically going to an enrolled DMEPOS supplier storefront and leaving the store with the diabetic supplies. The only entity that can bill for these non mail-order diabetic supplies is the entity from which the beneficiary or caregiver physically picked up the supplies. A diabetic supply furnished by any means other than mail-order or pickup will not be covered. The term “mail-order” means items shipped or delivered to the beneficiary’s residence by anymethod.

If they haven’t already been transitioned, beneficiaries should be matched to a contract supplier as soon as possible in anticipation of the large customer load suppliers will need to handle come July 1st.  A link to a list of contract suppliers is included below.

CMS Releases New Quality Assurance and Performance Improvement Tools

In response to provisions in the Affordable Care Act, CMS has released new materials for its Quality Assurance and Performance Improvement (QAPI) program to help nursing homes establish best practices for quality improvement. The new materials are hosted on CMS’s website, and include:

  • QAPI at a Glance, a step-by-step guide for implementing QAPI
  • Four process tools to help nursing homes get started laying a foundation that will sustain QAPI
  • QAPI News Brief – a newsletter describing QAPI principles which can be posted for review by caregivers, residents and family members
  • Video- Nursing Home QAPI – What is in it for you?

For more information about QAPI and available resources, visit CMS’s website. Questions about the program or new materials should be directed to


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