The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) delays implementation of the first round of the Competitive Acquisition Program (CAP). The initial CAP round will require patients in certain geographic areas to obtain certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), including mail order diabetic supplies, only from suppliers that have been awarded contracts by CMS pursuant to competitive bidding. Lawmakers believed CAP would save the Medicare program money by improving the accuracy of payments and deterring fraud. Critics of CAP argued that it would limit patient access to care and diminish the quality of care. The delay terminates all contracts awarded under CAP.

Under the delay imposed by MIPPA, reimbursement to DMEPOS providers in areas affected by CAP reverts to the former DMEPOS fee schedule, as increased retroactive to July 1, 2008. As a result, beneficiary liability for cost-sharing will likewise increase retroactively. In response to industry concern, the OIG issued a policy statement assuring providers that they would not face administrative sanctions if they waived, in good faith, additional cost-share amounts owed by beneficiaries as a result of the retroactive increases. The fee schedule for 2009, however, will be reduced by 9.5 percent for services and items covered by the CAP, and the reduction will apply to all areas of the country. For more information, please click here and here.