Definitions

10.2 - Definitions (Rev. 1502; Issued: 05-09-08; Effective/Implementation Date: 06-09-08) Advance Beneficiary Notice (ABN) is a written form provided by the supplier and signed by the Medicare beneficiary in which the beneficiary agrees to pay out of pocket for charges not paid for by Medicare. Bid means an offer to furnish an item in a competitive bidding area (CBA) for a particular price and time period that includes, where appropriate, any services that are directly related to the furnishing of the item. Competitive Bidding Area (CBA) is the area determined by CMS, wherein suppliers are awarded contracts to furnish certain DMEPOS items to Medicare beneficiaries who obtain competitive bid items in the CBA. Competitive bidding program means a program under the Medicare DMEPOS Competitive Bidding Program established within a designated CBA for a specified product category and contract period. Composite bid means the sum of a supplier’s weighted bids for all items within a product category within a CBA for purposes of allowing a comparison across bidding suppliers. Contract supplier means an entity that is awarded a contract by CMS to furnish items under a competitive bidding program. Grandfathered item means any one of the following categories of items for which payment is made on a rental basis prior to the implementation of a competitive bidding program and for which payment is made after implementation of a competitive bidding program to a grandfathered supplier that continues to furnish the items in accordance with 42 CFR §414.408(j): (1) Inexpensive or routinely purchased items furnished on a rental basis; (2) Items requiring frequent and substantial servicing; (3) Oxygen and oxygen equipment (not including oxygen contents, supplies or accessories furnished for use in conjunction with beneficiary-owned equipment); (4) Capped rental items furnished on a rental basis. Grandfathered supplier means a noncontract supplier that elects to continue to furnish grandfathered items to beneficiaries in a CBA to whom the supplier had furnished the items prior to implementation of the competitive bidding program. The beneficiary must elect to continue to receive the item from the grandfathered supplier. Item means a product included in a competitive bidding program that is identified by a HCPCS code, which may be specified for competitive bidding (for example, a product when it is furnished through mail order), or a combination of codes and/or modifiers. An item also includes the services directly related to the furnishing of that product to the beneficiary, including caregiver training and follow-up, supplier’s shipping charges, maintaining rented equipment in proper order, education, delivery, set-up and retrieval as appropriate. Item weight is a number assigned to an item based on national allowed services for that item when compared to other items in the same product category. Mail order refers to items ordered remotely (i.e., by phone, email, internet, or mail) and delivered to the beneficiary’s residence by common carriers (e.g., U.S. Postal Service, Federal Express, United Parcel Service) and does not include items obtained by beneficiaries from local supplier storefronts. Mail order contract supplier is a contract supplier from which items are ordered remotely and that furnishes items through common carrier (e.g., U.S. Postal Service, Federal Express, and United Parcel Service) to beneficiaries who maintain a permanent residence in a CBA. Metropolitan Statistical Area (MSA) has the same meaning as that given by the Office of Management and Budget. Minimal self-adjustment means an adjustment that the beneficiary, caretaker for the beneficiary, or supplier of the device can perform and does not require the services of a certified orthotist (that is, an individual certified by either the American Board for Certification in Orthotics and Prosthetics, Inc., or the Board for Orthotist/Prosthetist Certification) or an individual who has specialized training. Physician has the same meaning as in section 1861(r) of the Act. Nationwide competitive bidding area means a CBA that includes the United States, its Territories, and the District of Columbia. Nationwide mail order contract supplier means a mail order contract supplier that furnishes items in a nationwide competitive bidding area. Network means a group of small suppliers that form a legal entity to provide competitively bid items throughout the entire geographic area of a CBA. Noncontract supplier means a supplier that is not awarded a contract by CMS to furnish items included in a competitive bidding program. Off-The-Shelf (OTS) orthotics are orthotics that require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit the individual. Pivotal bid means the lowest composite bid based on bids submitted by suppliers for a product category that includes a sufficient number of suppliers to meet beneficiary demand for the items in that product category. Product category means a grouping of related items that are used to treat a similar medical condition. Regional competitive bidding area means a CBA that consists of a region of the United States, its Territories, and the District of Columbia. Regional mail order contract supplier means a mail order contract supplier that furnishes items in a regional competitive bidding area. Single payment amount means the allowed payment amount for an item furnished under a competitive bidding program. Small supplier means a supplier that generates gross revenue of $3.5 million or less in annual receipts, including Medicare and non-Medicare revenue. Specialty supplier means a skilled nursing facility (SNF) or nursing facility (NF) that, at the time of bidding, elects to furnish certain competitive bidding items only to its residents and that is awarded a contract. Supplier means an entity with a valid Medicare supplier number, including an entity that furnishes an item through the mail. Treating practitioner means a physician assistant, nurse practitioner, or clinical nurse specialist, as those terms are defined in section 1861(aa)(5) of the Act. Weighted bid means the item weight multiplied by the bid price submitted for that item.