CMS Pub. 100-04, ch. 36, § 20.6.1.1.3

Grandfathered Suppliers

(Rev. 1532, Issued: 06-11-08, Effective: 07-01-08, Implementation: 07-07-08)

A noncontract supplier that elects to become a grandfathered supplier is responsible for

providing notification to its Medicare customers residing in CBAs who are furnished items

identified in section 20.6.1. This notification should meet the following guidelines:

NOTE: This notification should only be sent to beneficiaries who the supplier is currently

serving and who maintain a permanent residence in a CBA. The list of ZIP Codes for each CBA,

the list of the HCPCS for competitively bid items, and the single payment amounts for these

items are located in public use files on the CBIC Web site at:

http://www.dmecompetitivebid.com/palmetto/cbic.nsf/DocsCat/Home.

• It should state that the supplier is offering to continue to furnish rental DME, oxygen and

oxygen equipment and/or related accessories and supplies that it is currently furnishing to

the beneficiary (i.e., before the start of the competitive bidding program) and to provide

these items to the beneficiary for the remainder of the rental period.

• It should state that the beneficiary has the choice to continue to receive a grandfathered

item(s) from the grandfathered supplier or to elect to begin receiving the item(s) from a

contract supplier after the competitive bidding program begins.

• It should provide the supplier’s telephone number so the beneficiary or caregiver may

call and notify the supplier of his/her election.

• The supplier should provide notification to the beneficiary at least 30 days before the start

date of the implementation of the Medicare DMEPOS Competitive Bidding Program.

• The supplier should receive an election from a beneficiary and maintain a record as to

whether the beneficiary chose to continue to receive the item from a grandfathered

supplier, chose to go to a contract supplier to receive the item or did not respond. The

record should indicate, at a minimum, the date that the beneficiary is notified that the

supplier elected to become a grandfathered supplier for the item(s), the date the

beneficiary made an election (if applicable), and the methods of communication used in

the case of each election activity (e.g. letter to the beneficiary).

• The supplier should inform the beneficiary of the end date of service and that

arrangements will be made to pick-up the item within 10 days of picking up the item.

• The supplier should remind the beneficiary of the date and time the equipment will be

picked up within 2 business days of picking up the equipment.

Recommended Schedule for Suppliers to Notify Beneficiaries of the Necessity to Decide on

Arrangements for Choosing to Use a Grandfathered Supplier or Contract Supplier

Notification - Supplier Number of Days Before the Start Date of the

Competitive Bidding Program

Initial Notification in writing 30 days

Notification before picking up

equipment

Within 10 days before picking up the equipment.

Final Notification before picking up

equipment

Within 2 business days of picking up the

equipment

** A sample notification letter will be posted on the CBIC Web site at

www.dmecompetitivebid.com.