Medicare Program; Public Meeting Regarding Inherent Reasonableness of Medicare Fee Schedule Amounts for Non-Mail Order (Retail) Diabetic Testing Supplies, 38067-38070 [2012-15425]
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Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / Notices
performance period that began on April
1, 2012. We announced the
organizations participating in the
Advanced Payment Model for the first
performance period (which began on
April 1, 2012) on April 10, 2012. The
second performance period of the
Advance Payment Model will begin on
July 1, 2012.
Additional information about the
Advance Payment Model, including
organizations currently participating in
the testing of the Model, is available on
the Advance Payment Model Web site at
https://www.innovations.cms.gov/
initiatives/ACO/Advance-Payment/.
II. Provisions of the Notice
We will be launching a third group of
Advance Payment Model ACOs on
January 1, 2013. We will accept
applications as specified in the DATES
section of this notice. We are creating
this new opportunity in response to
requests from stakeholders and potential
partners who requested additional
opportunities to partner with CMS as
Advance Payment ACOs.
Organizations interested in applying
to the Advance Payment Model must
also complete an application for the
Shared Savings Program. Information
about the application process and
deadlines for the Shared Savings
Program is available at https://
www.cms.gov/sharedsavingsprogram.
Additional information about the
application process for the Advance
Payment Model is available on the
Advance Payment Model Web site at
https://www.innovations.cms.gov/
initiatives/ACO/Advance-Payment/.
Authority: Section 1115A of the Social
Security Act.
Dated: June 19, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare
& Medicaid Services.
[FR Doc. 2012–15541 Filed 6–22–12; 11:15 am]
BILLING CODE 4120–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
rmajette on DSK2TPTVN1PROD with NOTICES
[CMS–1445–N]
Medicare Program; Public Meeting
Regarding Inherent Reasonableness of
Medicare Fee Schedule Amounts for
Non-Mail Order (Retail) Diabetic
Testing Supplies
ACTION:
Notice of meeting.
This notice announces a
public meeting that provides an
SUMMARY:
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opportunity for CMS to consult with
representatives of suppliers and other
interested parties regarding options to
adjust the Medicare payment amounts
for non-mail order diabetic testing
supplies. This meeting will provide the
public an opportunity to offer oral and
written comments.
Meeting Date: The public
meeting will be held on Monday, July
23, 2012, 9 a.m. to 1 p.m. eastern
daylight time (e.d.t.).
Deadline for Attendees that are
Foreign Nationals (reside outside the
U.S.) Registration: Prospective attendees
that are foreign nationals (as described
in section V. of this notice) are required
to identify themselves as such, and
provide the necessary information for
security clearance (as described in
section V. of this notice) by 5 p.m. e.d.t.
Thursday, July 5, 2012.
Deadline for All Other Attendees: All
other individuals who plan to attend the
public meeting must register by 5 p.m.
e.d.t. Monday, July 16, 2012.
Deadline for Requesting Special
Accommodations: Persons attending the
meeting who are hearing or visually
impaired, or have a condition that
requires special assistance or
accommodations, are asked to contact
the persons as specified in the FOR
FURTHER INFORMATION CONTACT section of
this notice no later July 9, 2012, 5 p.m.,
e.d.t.
Deadline for Submission of Written
Comments: Written comments must be
received at the address specified in the
ADDRESSES section of this notice by 5
p.m. e.d.t., Monday, July 30, 2012. Once
submitted, all comments are final.
DATES:
Meeting Location: The
public meeting will be held in the main
auditorium of the central building of the
Centers for Medicare and Medicaid
Services, 7500 Security Boulevard,
Baltimore, MD 21244–1850.
Submission of Written Comments:
Written comments may either be
emailed to DMEPOS@cms.hhs.gov or
sent via regular mail to Elliot Klein,
Centers for Medicare & Medicaid
Services, 7500 Security Boulevard, Mail
Stop C5–03–17, Baltimore, MD 21244–
1850.
Registration and Special
Accommodations: Individuals wishing
to participate or who need special
accommodations or both must register
by completing the on-line registration
located at https://www.cms.gov/apps/
events/upcomingevents.asp or by
contacting one of the persons listed in
the FOR FURTHER INFORMATION CONTACT
section of this notice.
ADDRESSES:
PO 00000
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38067
FOR FURTHER INFORMATION CONTACT:
Hafsa Vahora at (410) 786–7899 or
Hafsa.Vahora@cms.hhs.gov
Elliot Klein at (410) 786–0415 or
Elliot.Klein@cms.hhs.gov
SUPPLEMENTARY INFORMATION:
I. Background
A. Process for Using Inherent
Reasonableness Authority
In the December 13, 2005 Federal
Register (70 FR 73623), we published a
final rule entitled ‘‘Medicare Program;
Application of Inherent Reasonableness
Payment Policy to Medicare Part B
Services (Other Than Physician
Services)’’ that finalized a process for
establishing a realistic and equitable
payment amount for Medicare Part B
services (other than physicians’
services) when the existing payment
amounts are inherently unreasonable
because they are either grossly excessive
or grossly deficient. In that December
2005 final rule, we define grossly
excessive and deficient payment
amounts and provide the criteria for
using valid and reliable data in making
an inherent reasonableness
determination.
Sections 1842(b)(8) and (9) of the Act
and our regulations at 42 CFR
405.502(g) and (h) set forth the steps
that the Secretary must follow in
determining whether a payment amount
is grossly excessive and in setting a
special payment limit. Those steps are
as follows:
• Factors Considered In Determining
Whether Payment Amount is Grossly
Excessive or Deficient. When making a
determination that a payment amount is
grossly excessive, we take into account
several factors. Factors that may result
in grossly excessive or deficient
payment amounts include, but are not
limited, to the following:
++ The marketplace is not
competitive.
++ Medicare and Medicaid are the
sole or primary sources of payment for
a category of items and services.
++ The payment amounts for a
category of items and services do not
reflect changing technology, increased
facility with that technology, or changes
in acquisition, production, or supplier
costs.
++ The payment amounts for a
category of items or services in a
particular locality are grossly high or
lower than payment amounts in other
comparable localities for the category of
items or services.
++ Payment amounts for a category of
items and services are grossly higher or
lower than acquisition or production
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Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / Notices
costs for the category of items and
services.
++ There have been increases in
payment amounts for a category of items
or services that cannot be explained by
inflation or technology.
++ The payment amounts for an item
or service are grossly higher or lower
than the payment amounts made for the
item or service by other purchasers in
the same locality.
++ A new technology exists which is
not reflected in the existing payment
allowances.
• Factors Considered in Establishing
a Payment Limit. In establishing a
payment limit for a category of items or
services, we consider the available
information that is relevant to the
category of items or services and
establish a payment amount that is
realistic and equitable. The factors we
consider in setting a payment include,
but are not limited to the following:
++ Price markup.
++ Differences in charges.
++ Costs.
++ Use.
++ Payment amounts in other
localities.
• Use of Valid and Reliable Data. In
determining whether a payment amount
is grossly excessive or deficient and in
establishing an appropriate payment
amount, we use valid and reliable data.
To ensure that valid and reliable data
are used, we must meet the criteria set
forth at 42 CFR 405.502(g)(4)(i) through
(xi), to the extent applicable.
• Impact Analysis. We consider the
potential impact of the payment
adjustments on quality, access,
beneficiary liability, assignment rates,
and participation of suppliers.
• Supplier Consultation. Before
making a determination that a payment
amount is not inherently reasonable, we
consult with representatives of the
supplier industry likely to be affected by
the change in payment amounts.
• Publication of Proposed
Determination. We publish a proposed
notice in the Federal Register that—
++ Provides the proposed payment
amount or method proposed to be
established with respect to the item or
service;
++ Explains the factors and data
considered in determining that the
payment amount was grossly excessive
or deficient;
++ Explains the factors and data
considered in determining the payment
amounts or methodology, including the
economic justification for a uniform fee
or payment limit if it is proposed;
++ Explains the potential impact of
the payment adjustments and;
++ Allows at least 60 days for public
comment.
• Publication of Final Determination.
We publish a final notice in the Federal
Register containing our final
determination with respect to the
payment amount to be established for
the item or service, explaining the
factors and data considered in making
the final determination, and responding
to public comments.
B. Mandate To Phase In Competitive
Bidding Programs for Diabetic Testing
Supplies
Sections 1847(a)(1)(A) and (a)(2)(A) of
the Act mandate the implementation of
competitive bidding programs for
durable medical equipment (DME) and
medical supplies, including diabetic
testing supplies. Under these programs,
contracts are to be awarded to suppliers
for furnishing DME and medical
supplies throughout the United States at
reduced payment amounts. Diabetic
testing supplies are supplies necessary
for the effective use of durable blood
glucose monitors and include test strips,
lancets, spring-powered lancet devices,
calibration solution/chips, and
replacement batteries. In 2011, annual
Medicare Part B allowed charges for
these items were approximately $1.6
billion, of which approximately $552
million (over one-third) was attributed
to claims for non-mail order items.
Section 1847(a)(1)(B)(ii) of the Act
provides authority for phasing in items
and services under the competitive
bidding programs, starting with the
highest cost and highest volume items
and services or those items and services
determined to have the largest savings
potential. The majority of Medicare
beneficiaries receive their diabetic
testing supplies on a mail order basis,
and the competitive bidding program
was phased in first for supplies
furnished via this delivery method as
part of the Round One Rebid of the
competitive bidding program. In 2011,
Medicare-allowed payment amounts for
a box of 50 mail order test strips were
reduced by 55 percent on average in 9
local metropolitan areas as a result of
these programs.
TABLE 1—COMPARISON OF 2011 FEE SCHEDULE AMOUNTS (NON-MAIL ORDER AND MAIL ORDER) AND MAIL ORDER
COMPETITIVE BIDDING AMOUNTS
Fee schedule
amount (nonmail)
Local competitive bidding area
Fee schedule
amount (mail)
$34.85
38.74
38.74
36.24
34.35
38.75
38.75
38.75
38.75
37.55
37.67
30.03
33.39
33.39
31.24
29.60
33.40
33.40
33.40
33.40
32.36
32.47
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Charlotte-Gastonia-Concord, NC–SC ..........................................................................................
Cincinnati-Middletown, OH ..........................................................................................................
Cleveland-Elyria-Mentor, OH .......................................................................................................
Dallas-Fort Worth-Arlington, TX ..................................................................................................
Kansas City, MO–KS ...................................................................................................................
Miami-Fort Lauderdale-Pompano Beach, FL ..............................................................................
Orlando, FL ..................................................................................................................................
Pittsburgh, PA ..............................................................................................................................
Riverside-San Bernardino-Ontario, CA .......................................................................................
Average of Nine Areas ................................................................................................................
National Average .........................................................................................................................
A national DMEPOS competitive
bidding program for mail order diabetic
testing supplies is scheduled to take
effect in 2013. For this competition, and
future competitions for diabetic testing
supplies, the definitions of mail order
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item and non-mail order item set forth
in 42 CFR 414.402 will be used to
determine what items will be included
in the competitions. These definitions
are as follows:
PO 00000
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Competitive
bidding
amount
14.50
15.22
15.62
14.25
13.94
15.20
14.50
14.50
13.88
14.62
........................
• Mail Order Item—Any item shipped
or delivered to the beneficiary’s home,
regardless of the method of delivery.
• Non-Mail Order Item—Any item
that a beneficiary or caregiver picks up
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in person at a local pharmacy or
supplier storefront.
Because annual allowed charges for
non-mail order diabetic testing supplies
are approximately $552 million, this
category of items and services
represents the highest volume category
of items or services yet to be phased in
under the DMEPOS competitive bidding
programs. Also, based on the results of
the competition for mail order diabetic
testing supplies in nine Competitive
Bidding Areas (CBAs) and a review of
other pricing information for diabetic
testing supplies in general, we believe
the savings potential for non-mail order
diabetic testing supplies is significant.
Although we recognize that there are
pricing differences between mail order
and non-mail order diabetic testing
supplies because of the delivery
methods for these supplies, information
about the prices of mail order diabetic
testing supplies can inform the analysis
of prices for non-mail order diabetic
testing supplies because several key cost
components are identical for both, such
as product acquisition costs and
administrative costs, including claims
processing and paperwork costs. In
addition to the significant program and
beneficiary savings that can be
generated by lowering the payment
amounts for non-mail order diabetic
testing supplies, adjusting the payment
amounts for these items to bring them
more in line with the allowed payment
amounts for mail order diabetic testing
supplies is important for a number of
reasons, including the fact that
maintaining a significant discrepancy
between what Medicare pays for mail
order supplies versus non-mail order
supplies may encourage fraud and abuse
such as billing for mail order supplies
as if they were furnished on a non-mail
order basis. The discrepancy also
penalizes beneficiaries who choose to
obtain their supplies on a non-mail
order basis in the form of significantly
higher coinsurance payments.
C. Use of Inherent Reasonableness
Authority To Delay Phase-In of Items
Under Competitive Bidding
Rather than phasing in non-mail order
diabetic testing supplies under the
competitive bidding program at this
time, we are considering an alternative
for adjusting the payment amounts for
non-mail order diabetic testing supplies
in the short term using information
obtained from the local Round One
Rebid competitions for mail order
supplies and other pricing information
to establish special payment limits for
non-mail order diabetic testing supplies.
We believe that this alternative would
allow beneficiaries the greatest degree of
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choice in deciding where to obtain their
non-mail order diabetic testing supplies
as suppliers would not have to be
awarded contracts to continue
furnishing these items to Medicare
beneficiaries. It also has the potential to
reduce the significant discrepancy in
payment amounts between mail order
and non-mail order diabetic testing
supplies and generate beneficiary and
program savings sooner than could be
achieved through competitive bidding.
National reductions to the fee schedule
amounts would reduce the savings
potential that could result from
application of competitive bidding. This
would alter the standing of non-mail
order diabetic testing supplies relative
to other items in terms of level of
priority for phase-in under the
competitive bidding program. It is also
possible that use of the inherent
reasonableness authority over time to
establish special payment limits for
non-mail order diabetic testing supplies
could mean that including these items
under the competitive bidding program
will not be necessary as significant
savings would not be achieved.
Because information generated from
the local Round One Rebid competitions
for mail order diabetic testing supplies
and information about the cost of
diabetic testing supplies is available, we
believe we have the information
necessary to determine whether
payment amounts for non-mail order
diabetic testing supplies are grossly
excessive and should be adjusted using
our inherent reasonableness authority.
Use of the inherent reasonableness
authority would delay or eliminate the
need to have local pharmacies compete
and win contracts in order to continue
furnishing non-mail order diabetic
testing supplies to Medicare
beneficiaries, thereby maintaining the
option of obtaining these items from any
local, enrolled Medicare supplier.
Again, given the high volume of
expenditures for these items,
competitive bidding for these items
would need to be implemented in the
near future if the savings potential for
these items is not lowered through use
of the inherent reasonableness
authority.
II. Meeting Agenda
The tentative agenda is as follows:
• Sign In
• Opening Remarks
• CMS Presentation Regarding Payment
for Non-Mail Order Diabetic Testing
Supplies
++ Mandate for Competitive Bidding
++ Establishing Special Payment Limits
as a Means of Delaying Competitive
Bidding for These Items
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++ Steps of the Inherent Reasonableness
Process
• Public Comments
• Closing Remarks
III. Meeting Registration
A. Required Information for Registration
The following information must be
provided when registering:
• Name.
• Company name and address.
• Direct-dial telephone and fax
numbers.
• Email address.
• Special needs information.
A CMS staff member will confirm
your registration by email.
B. Registration Process
All comments will be heard and
accepted after the presentation by CMS
staff is completed until the end of the
public meeting. If there are comments
after the meeting, we will accept written
comments until the date specified in the
DATES section of this notice.
C. Additional Meeting/Registration
Information
This public meeting is scheduled in
order to fulfill the requirement of
section 1842(b)(9)(A) of the Act to
consult with representatives of
suppliers or other individuals who
furnish an item or service before making
a determination under section
1842(b)(8)(B) of the Act with regard to
that item or service.
IV. Comment Format
A. Oral Comments From Meeting
Attendees
Oral comments will be heard from the
meeting attendees during the allotted
time during the public meeting.
Comments should last no longer than 10
minutes each to allow as much
opportunity for comments from as many
interested individuals as possible. There
will be a sign up during the meeting to
accommodate oral comments and
speakers will be called in the order in
which they sign up. We encourage
anyone providing oral comments to also
submit their comments in writing.
B. Written Comments From Meeting
Attendees
Written comments will be accepted
from the general public and meeting
registrants until the date specified in the
DATES section. Comments must be sent
to the address specified in the
ADDRESSES section of this notice.
Meeting attendees may also submit their
written comments at the meeting.
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Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / Notices
C. Summary Comments and Responses
From Public Meeting
The summarized comments and
responses from the public meeting will
be provided in the proposed notice for
the adjustment of fee-schedule amounts
for non-mail order diabetic testing
supplies.
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V. Security, Building, and Parking
Guidelines
The meeting is held within the CMS
Complex which is not open to the
general public. Visitors to the complex
are required to show a valid U.S.
Government issued photo identification,
preferably a driver’s license, at the time
of entry. Participants will also be subject
to a vehicular search before access to the
complex is granted. Participants not in
possession of a valid identification or
who are in possession of prohibited
items will be denied access to the
complex. Prohibited items on Federal
Property include but are not limited to,
alcoholic beverages, illegal narcotics,
dogs or other animals except Seeing Eye
dogs and other dogs trained to assist the
handicapped, explosives, firearms or
other dangerous weapons (including
pocket knives).
Once cleared for entry to the complex
participants will be directed to parking
by a security officer. In order to ensure
expedited entry into the building it is
recommended that participants have
their ID and a copy of their written
meeting registration confirmation
readily available and that they do not
bring laptops or large/bulky items into
the building. Participants are reminded
that photography on the CMS complex
is prohibited. CMS has also been
declared a tobacco free campus and
violators are subject to legal action.
In planning arrival time, we
recommend allowing additional time to
clear security. Individuals who are not
registered in advance will not be
permitted to enter the building and will
be unable to attend the meeting. The
public may not enter the building earlier
than 45 minutes before the convening of
the meeting. Guest access to the
complex is limited to the meeting area,
the main lobby, and the cafeteria. If a
visitor is found outside of those areas
without proper escort they may be
escorted out of the facility.
Also be mindful that there will be an
opportunity for comment and we
request that everyone waits for the
appropriate time to present their
opinions. Disruptive behavior will not
be tolerated and may result in removal
from the meetings and escort from the
complex. No visitor is allowed to attach
USB cables, thumb drives or any other
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equipment to any CMS information
technology (IT) system or hardware for
any purpose at anytime. Additionally,
CMS staff is prohibited from taking such
actions on behalf of a visitor or utilizing
any removable media provided by a
visitor.
We cannot assume responsibility for
coordinating the receipt, transfer,
transport, storage, set-up, safety, or
timely arrival of any personal
belongings or items used for
demonstration or to support a comment.
Special arrangements and approvals are
required at least 2 weeks prior to the
public meeting in order to bring pieces
of equipment or medical devices. These
arrangements need to be made with the
public meeting coordinator. It is
possible that certain requests made in
advance of the public meeting could be
denied because of unique safety,
security or handling issues related to the
equipment. A minimum of 2 weeks is
required for approvals and security
procedures. Any request not submitted
at least 2 weeks in advance of the public
meeting will be denied.
CMS policy requires that every
foreign visitor is assigned a host. The
host/hosting official is required to
inform the Division of Critical
Infrastructure Protection (DCIP) at least
12 business days in advance of any visit
by a foreign national visitor. Foreign
National visitors will be required to
produce a valid passport at the time of
entry. Attendees that are Foreign
Nationals need to identify themselves as
such, and provide the following
information for security clearance to the
public meeting coordinator by the date
specified in the DATES section of this
notice:
• Visitor’s full name (as it appears on
passport).
• Gender.
• Country of origin and citizenship.
• Biographical data and related
information.
• Date of birth.
• Place of birth.
• Passport number.
• Passport issue date.
• Passport expiration date.
• Dates of visits.
• Company name.
• Position/Title.
Meeting participants should arrive
early to allow time to clear security and
sign-in. The meeting is expected to
begin promptly as scheduled.
Authority: Section 1842(b)(9) of the Act.
Dated: June 19, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare
& Medicaid Services.
[FR Doc. 2012–15425 Filed 6–22–12; 4:15 pm]
BILLING CODE 4120–01–P
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DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Administration for Children and
Families
[CFDA Number 93.676]
Office of Refugee Resettlement;
Announcing the Award of a SingleSource Program Expansion
Supplemental Grant for
Unaccompanied Alien Children’s
Shelter Care to Baptist Children and
Family Services (BCFS) in San
Antonio, TX
Office of Refugee Resettlement,
ACF, HHS.
ACTION: The Office of Refugee
Resettlement announces the award of a
single-source program expansion
supplement grant from its
Unaccompanied Alien Children’s
Program.
AGENCY:
The Administration for
Children and Families (ACF), Office of
Refugee Resettlement (ORR) announces
the award of a single-source program
expansion supplement grant to Baptist
Children and Family Services (BCFS) in
San Antonio, TX, for a total of
$22,725,223. The additional funding
provided by the awards will support
services to refugees through September
30, 2012.
DATES: Project Period: October 1, 2011—
September 30, 2012.
FOR FURTHER INFORMATION CONTACT:
Kenneth Tota, Deputy Director, Office of
Refugee Resettlement, Administration
for Children and Families, 370 L’Enfant
Promenade SW., Washington, DC 20447,
Telephone (202) 401–4858.
SUPPLEMENTARY INFORMATION: The
supplement grant will support the
expansion of bed capacity to meet the
number of unaccompanied alien
children referrals from the Department
of Homeland Security (DHS). The
funding program is mandated by
Section 462 of the Homeland Security
Act to ensure appropriate placement of
all referrals from the DHS. The program
is tied to DHS apprehension strategies
and sporadic number of border crossers.
The program has specific
requirements for the provision of
services to unaccompanied alien
children. Existing grantees are the only
entities with the infrastructure,
licensing, experience and appropriate
level of trained staff to meet the
required service requirements and the
urgent need for expansion of services in
response to unexpected arrivals of
unaccompanied children. The program
expansion supplement will support
SUMMARY:
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]]>Agencies
[Federal Register Volume 77, Number 123 (Tuesday, June 26, 2012)]
[Notices]
[Pages 38067-38070]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-15425]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-1445-N]
Medicare Program; Public Meeting Regarding Inherent
Reasonableness of Medicare Fee Schedule Amounts for Non-Mail Order
(Retail) Diabetic Testing Supplies
ACTION: Notice of meeting.
-----------------------------------------------------------------------
SUMMARY: This notice announces a public meeting that provides an
opportunity for CMS to consult with representatives of suppliers and
other interested parties regarding options to adjust the Medicare
payment amounts for non-mail order diabetic testing supplies. This
meeting will provide the public an opportunity to offer oral and
written comments.
DATES: Meeting Date: The public meeting will be held on Monday, July
23, 2012, 9 a.m. to 1 p.m. eastern daylight time (e.d.t.).
Deadline for Attendees that are Foreign Nationals (reside outside
the U.S.) Registration: Prospective attendees that are foreign
nationals (as described in section V. of this notice) are required to
identify themselves as such, and provide the necessary information for
security clearance (as described in section V. of this notice) by 5
p.m. e.d.t. Thursday, July 5, 2012.
Deadline for All Other Attendees: All other individuals who plan to
attend the public meeting must register by 5 p.m. e.d.t. Monday, July
16, 2012.
Deadline for Requesting Special Accommodations: Persons attending
the meeting who are hearing or visually impaired, or have a condition
that requires special assistance or accommodations, are asked to
contact the persons as specified in the FOR FURTHER INFORMATION CONTACT
section of this notice no later July 9, 2012, 5 p.m., e.d.t.
Deadline for Submission of Written Comments: Written comments must
be received at the address specified in the ADDRESSES section of this
notice by 5 p.m. e.d.t., Monday, July 30, 2012. Once submitted, all
comments are final.
ADDRESSES: Meeting Location: The public meeting will be held in the
main auditorium of the central building of the Centers for Medicare and
Medicaid Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Submission of Written Comments: Written comments may either be
emailed to DMEPOS@cms.hhs.gov or sent via regular mail to Elliot Klein,
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Mail
Stop C5-03-17, Baltimore, MD 21244-1850.
Registration and Special Accommodations: Individuals wishing to
participate or who need special accommodations or both must register by
completing the on-line registration located at https://www.cms.gov/apps/events/upcomingevents.asp or by contacting one of the persons listed in
the FOR FURTHER INFORMATION CONTACT section of this notice.
FOR FURTHER INFORMATION CONTACT: Hafsa Vahora at (410) 786-7899 or
Hafsa.Vahora@cms.hhs.gov
Elliot Klein at (410) 786-0415 or Elliot.Klein@cms.hhs.gov
SUPPLEMENTARY INFORMATION:
I. Background
A. Process for Using Inherent Reasonableness Authority
In the December 13, 2005 Federal Register (70 FR 73623), we
published a final rule entitled ``Medicare Program; Application of
Inherent Reasonableness Payment Policy to Medicare Part B Services
(Other Than Physician Services)'' that finalized a process for
establishing a realistic and equitable payment amount for Medicare Part
B services (other than physicians' services) when the existing payment
amounts are inherently unreasonable because they are either grossly
excessive or grossly deficient. In that December 2005 final rule, we
define grossly excessive and deficient payment amounts and provide the
criteria for using valid and reliable data in making an inherent
reasonableness determination.
Sections 1842(b)(8) and (9) of the Act and our regulations at 42
CFR 405.502(g) and (h) set forth the steps that the Secretary must
follow in determining whether a payment amount is grossly excessive and
in setting a special payment limit. Those steps are as follows:
Factors Considered In Determining Whether Payment Amount
is Grossly Excessive or Deficient. When making a determination that a
payment amount is grossly excessive, we take into account several
factors. Factors that may result in grossly excessive or deficient
payment amounts include, but are not limited, to the following:
++ The marketplace is not competitive.
++ Medicare and Medicaid are the sole or primary sources of payment
for a category of items and services.
++ The payment amounts for a category of items and services do not
reflect changing technology, increased facility with that technology,
or changes in acquisition, production, or supplier costs.
++ The payment amounts for a category of items or services in a
particular locality are grossly high or lower than payment amounts in
other comparable localities for the category of items or services.
++ Payment amounts for a category of items and services are grossly
higher or lower than acquisition or production
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costs for the category of items and services.
++ There have been increases in payment amounts for a category of
items or services that cannot be explained by inflation or technology.
++ The payment amounts for an item or service are grossly higher or
lower than the payment amounts made for the item or service by other
purchasers in the same locality.
++ A new technology exists which is not reflected in the existing
payment allowances.
Factors Considered in Establishing a Payment Limit. In
establishing a payment limit for a category of items or services, we
consider the available information that is relevant to the category of
items or services and establish a payment amount that is realistic and
equitable. The factors we consider in setting a payment include, but
are not limited to the following:
++ Price markup.
++ Differences in charges.
++ Costs.
++ Use.
++ Payment amounts in other localities.
Use of Valid and Reliable Data. In determining whether a
payment amount is grossly excessive or deficient and in establishing an
appropriate payment amount, we use valid and reliable data. To ensure
that valid and reliable data are used, we must meet the criteria set
forth at 42 CFR 405.502(g)(4)(i) through (xi), to the extent
applicable.
Impact Analysis. We consider the potential impact of the
payment adjustments on quality, access, beneficiary liability,
assignment rates, and participation of suppliers.
Supplier Consultation. Before making a determination that
a payment amount is not inherently reasonable, we consult with
representatives of the supplier industry likely to be affected by the
change in payment amounts.
Publication of Proposed Determination. We publish a
proposed notice in the Federal Register that--
++ Provides the proposed payment amount or method proposed to be
established with respect to the item or service;
++ Explains the factors and data considered in determining that the
payment amount was grossly excessive or deficient;
++ Explains the factors and data considered in determining the
payment amounts or methodology, including the economic justification
for a uniform fee or payment limit if it is proposed;
++ Explains the potential impact of the payment adjustments and;
++ Allows at least 60 days for public comment.
Publication of Final Determination. We publish a final
notice in the Federal Register containing our final determination with
respect to the payment amount to be established for the item or
service, explaining the factors and data considered in making the final
determination, and responding to public comments.
B. Mandate To Phase In Competitive Bidding Programs for Diabetic
Testing Supplies
Sections 1847(a)(1)(A) and (a)(2)(A) of the Act mandate the
implementation of competitive bidding programs for durable medical
equipment (DME) and medical supplies, including diabetic testing
supplies. Under these programs, contracts are to be awarded to
suppliers for furnishing DME and medical supplies throughout the United
States at reduced payment amounts. Diabetic testing supplies are
supplies necessary for the effective use of durable blood glucose
monitors and include test strips, lancets, spring-powered lancet
devices, calibration solution/chips, and replacement batteries. In
2011, annual Medicare Part B allowed charges for these items were
approximately $1.6 billion, of which approximately $552 million (over
one-third) was attributed to claims for non-mail order items.
Section 1847(a)(1)(B)(ii) of the Act provides authority for phasing
in items and services under the competitive bidding programs, starting
with the highest cost and highest volume items and services or those
items and services determined to have the largest savings potential.
The majority of Medicare beneficiaries receive their diabetic testing
supplies on a mail order basis, and the competitive bidding program was
phased in first for supplies furnished via this delivery method as part
of the Round One Rebid of the competitive bidding program. In 2011,
Medicare-allowed payment amounts for a box of 50 mail order test strips
were reduced by 55 percent on average in 9 local metropolitan areas as
a result of these programs.
Table 1--Comparison of 2011 Fee Schedule Amounts (Non-Mail Order and Mail Order) and Mail Order Competitive
Bidding Amounts
----------------------------------------------------------------------------------------------------------------
Fee schedule Competitive
Local competitive bidding area amount (non- Fee schedule bidding
mail) amount (mail) amount
----------------------------------------------------------------------------------------------------------------
Charlotte-Gastonia-Concord, NC-SC............................... $34.85 30.03 14.50
Cincinnati-Middletown, OH....................................... 38.74 33.39 15.22
Cleveland-Elyria-Mentor, OH..................................... 38.74 33.39 15.62
Dallas-Fort Worth-Arlington, TX................................. 36.24 31.24 14.25
Kansas City, MO-KS.............................................. 34.35 29.60 13.94
Miami-Fort Lauderdale-Pompano Beach, FL......................... 38.75 33.40 15.20
Orlando, FL..................................................... 38.75 33.40 14.50
Pittsburgh, PA.................................................. 38.75 33.40 14.50
Riverside-San Bernardino-Ontario, CA............................ 38.75 33.40 13.88
Average of Nine Areas........................................... 37.55 32.36 14.62
National Average................................................ 37.67 32.47 ..............
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A national DMEPOS competitive bidding program for mail order
diabetic testing supplies is scheduled to take effect in 2013. For this
competition, and future competitions for diabetic testing supplies, the
definitions of mail order item and non-mail order item set forth in 42
CFR 414.402 will be used to determine what items will be included in
the competitions. These definitions are as follows:
Mail Order Item--Any item shipped or delivered to the
beneficiary's home, regardless of the method of delivery.
Non-Mail Order Item--Any item that a beneficiary or
caregiver picks up
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in person at a local pharmacy or supplier storefront.
Because annual allowed charges for non-mail order diabetic testing
supplies are approximately $552 million, this category of items and
services represents the highest volume category of items or services
yet to be phased in under the DMEPOS competitive bidding programs.
Also, based on the results of the competition for mail order diabetic
testing supplies in nine Competitive Bidding Areas (CBAs) and a review
of other pricing information for diabetic testing supplies in general,
we believe the savings potential for non-mail order diabetic testing
supplies is significant. Although we recognize that there are pricing
differences between mail order and non-mail order diabetic testing
supplies because of the delivery methods for these supplies,
information about the prices of mail order diabetic testing supplies
can inform the analysis of prices for non-mail order diabetic testing
supplies because several key cost components are identical for both,
such as product acquisition costs and administrative costs, including
claims processing and paperwork costs. In addition to the significant
program and beneficiary savings that can be generated by lowering the
payment amounts for non-mail order diabetic testing supplies, adjusting
the payment amounts for these items to bring them more in line with the
allowed payment amounts for mail order diabetic testing supplies is
important for a number of reasons, including the fact that maintaining
a significant discrepancy between what Medicare pays for mail order
supplies versus non-mail order supplies may encourage fraud and abuse
such as billing for mail order supplies as if they were furnished on a
non-mail order basis. The discrepancy also penalizes beneficiaries who
choose to obtain their supplies on a non-mail order basis in the form
of significantly higher coinsurance payments.
C. Use of Inherent Reasonableness Authority To Delay Phase-In of Items
Under Competitive Bidding
Rather than phasing in non-mail order diabetic testing supplies
under the competitive bidding program at this time, we are considering
an alternative for adjusting the payment amounts for non-mail order
diabetic testing supplies in the short term using information obtained
from the local Round One Rebid competitions for mail order supplies and
other pricing information to establish special payment limits for non-
mail order diabetic testing supplies. We believe that this alternative
would allow beneficiaries the greatest degree of choice in deciding
where to obtain their non-mail order diabetic testing supplies as
suppliers would not have to be awarded contracts to continue furnishing
these items to Medicare beneficiaries. It also has the potential to
reduce the significant discrepancy in payment amounts between mail
order and non-mail order diabetic testing supplies and generate
beneficiary and program savings sooner than could be achieved through
competitive bidding. National reductions to the fee schedule amounts
would reduce the savings potential that could result from application
of competitive bidding. This would alter the standing of non-mail order
diabetic testing supplies relative to other items in terms of level of
priority for phase-in under the competitive bidding program. It is also
possible that use of the inherent reasonableness authority over time to
establish special payment limits for non-mail order diabetic testing
supplies could mean that including these items under the competitive
bidding program will not be necessary as significant savings would not
be achieved.
Because information generated from the local Round One Rebid
competitions for mail order diabetic testing supplies and information
about the cost of diabetic testing supplies is available, we believe we
have the information necessary to determine whether payment amounts for
non-mail order diabetic testing supplies are grossly excessive and
should be adjusted using our inherent reasonableness authority. Use of
the inherent reasonableness authority would delay or eliminate the need
to have local pharmacies compete and win contracts in order to continue
furnishing non-mail order diabetic testing supplies to Medicare
beneficiaries, thereby maintaining the option of obtaining these items
from any local, enrolled Medicare supplier. Again, given the high
volume of expenditures for these items, competitive bidding for these
items would need to be implemented in the near future if the savings
potential for these items is not lowered through use of the inherent
reasonableness authority.
II. Meeting Agenda
The tentative agenda is as follows:
Sign In
Opening Remarks
CMS Presentation Regarding Payment for Non-Mail Order Diabetic
Testing Supplies
++ Mandate for Competitive Bidding
++ Establishing Special Payment Limits as a Means of Delaying
Competitive Bidding for These Items
++ Steps of the Inherent Reasonableness Process
Public Comments
Closing Remarks
III. Meeting Registration
A. Required Information for Registration
The following information must be provided when registering:
Name.
Company name and address.
Direct-dial telephone and fax numbers.
Email address.
Special needs information.
A CMS staff member will confirm your registration by email.
B. Registration Process
All comments will be heard and accepted after the presentation by
CMS staff is completed until the end of the public meeting. If there
are comments after the meeting, we will accept written comments until
the date specified in the DATES section of this notice.
C. Additional Meeting/Registration Information
This public meeting is scheduled in order to fulfill the
requirement of section 1842(b)(9)(A) of the Act to consult with
representatives of suppliers or other individuals who furnish an item
or service before making a determination under section 1842(b)(8)(B) of
the Act with regard to that item or service.
IV. Comment Format
A. Oral Comments From Meeting Attendees
Oral comments will be heard from the meeting attendees during the
allotted time during the public meeting. Comments should last no longer
than 10 minutes each to allow as much opportunity for comments from as
many interested individuals as possible. There will be a sign up during
the meeting to accommodate oral comments and speakers will be called in
the order in which they sign up. We encourage anyone providing oral
comments to also submit their comments in writing.
B. Written Comments From Meeting Attendees
Written comments will be accepted from the general public and
meeting registrants until the date specified in the DATES section.
Comments must be sent to the address specified in the ADDRESSES section
of this notice. Meeting attendees may also submit their written
comments at the meeting.
[[Page 38070]]
C. Summary Comments and Responses From Public Meeting
The summarized comments and responses from the public meeting will
be provided in the proposed notice for the adjustment of fee-schedule
amounts for non-mail order diabetic testing supplies.
V. Security, Building, and Parking Guidelines
The meeting is held within the CMS Complex which is not open to the
general public. Visitors to the complex are required to show a valid
U.S. Government issued photo identification, preferably a driver's
license, at the time of entry. Participants will also be subject to a
vehicular search before access to the complex is granted. Participants
not in possession of a valid identification or who are in possession of
prohibited items will be denied access to the complex. Prohibited items
on Federal Property include but are not limited to, alcoholic
beverages, illegal narcotics, dogs or other animals except Seeing Eye
dogs and other dogs trained to assist the handicapped, explosives,
firearms or other dangerous weapons (including pocket knives).
Once cleared for entry to the complex participants will be directed
to parking by a security officer. In order to ensure expedited entry
into the building it is recommended that participants have their ID and
a copy of their written meeting registration confirmation readily
available and that they do not bring laptops or large/bulky items into
the building. Participants are reminded that photography on the CMS
complex is prohibited. CMS has also been declared a tobacco free campus
and violators are subject to legal action.
In planning arrival time, we recommend allowing additional time to
clear security. Individuals who are not registered in advance will not
be permitted to enter the building and will be unable to attend the
meeting. The public may not enter the building earlier than 45 minutes
before the convening of the meeting. Guest access to the complex is
limited to the meeting area, the main lobby, and the cafeteria. If a
visitor is found outside of those areas without proper escort they may
be escorted out of the facility.
Also be mindful that there will be an opportunity for comment and
we request that everyone waits for the appropriate time to present
their opinions. Disruptive behavior will not be tolerated and may
result in removal from the meetings and escort from the complex. No
visitor is allowed to attach USB cables, thumb drives or any other
equipment to any CMS information technology (IT) system or hardware for
any purpose at anytime. Additionally, CMS staff is prohibited from
taking such actions on behalf of a visitor or utilizing any removable
media provided by a visitor.
We cannot assume responsibility for coordinating the receipt,
transfer, transport, storage, set-up, safety, or timely arrival of any
personal belongings or items used for demonstration or to support a
comment. Special arrangements and approvals are required at least 2
weeks prior to the public meeting in order to bring pieces of equipment
or medical devices. These arrangements need to be made with the public
meeting coordinator. It is possible that certain requests made in
advance of the public meeting could be denied because of unique safety,
security or handling issues related to the equipment. A minimum of 2
weeks is required for approvals and security procedures. Any request
not submitted at least 2 weeks in advance of the public meeting will be
denied.
CMS policy requires that every foreign visitor is assigned a host.
The host/hosting official is required to inform the Division of
Critical Infrastructure Protection (DCIP) at least 12 business days in
advance of any visit by a foreign national visitor. Foreign National
visitors will be required to produce a valid passport at the time of
entry. Attendees that are Foreign Nationals need to identify themselves
as such, and provide the following information for security clearance
to the public meeting coordinator by the date specified in the DATES
section of this notice:
Visitor's full name (as it appears on passport).
Gender.
Country of origin and citizenship.
Biographical data and related information.
Date of birth.
Place of birth.
Passport number.
Passport issue date.
Passport expiration date.
Dates of visits.
Company name.
Position/Title.
Meeting participants should arrive early to allow time to clear
security and sign-in. The meeting is expected to begin promptly as
scheduled.
Authority: Section 1842(b)(9) of the Act.
Dated: June 19, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2012-15425 Filed 6-22-12; 4:15 pm]
BILLING CODE 4120-01-P
