CMS Pub. 100-04, ch. 36, § 50.9

Noncontract suppliers of capped rental DME equipment may elect to become “grandfathered

suppliers” and continue furnishing equipment to their existing beneficiaries after the start of the

DMEPOS Competitive Bidding Program, if the beneficiary agrees to the arrangement. This

grandfathering process only applies to suppliers that began furnishing the capped rental DME

item to beneficiaries in a CBA prior to the implementation of the competitive bidding program

for that area and choose to continue to furnish the grandfathered item to these same beneficiaries

in the CBA after the start of the DMEPOS Competitive Bidding Program. See §20.6 for

additional information on payments to noncontract suppliers.

If a noncontract supplier does not want to continue furnishing capped rental DME to its existing

customers/beneficiaries after the start of the DMEPOS Competitive Bidding Program, the

beneficiary must use a contract supplier to obtain the item. Ordinarily, the title to the capped

rental DME item would transfer to the beneficiary after rental payments have been made for 13

months of continuous use. However, for beneficiaries that switch from a noncontract supplier to

a contract supplier, the 13 month capped rental period starts over again. In this case, Medicare

allows for a minimum of 13 months of rental payments to be made to a contract supplier because

their current supplier chose not to become a grandfathered supplier. Therefore, under DMEPOS

Competitive Bidding Program, when a beneficiary switches from a noncontract supplier to a

contract supplier, up to 25 continuous payments could be made for the capped rental DME item.

The beneficiary is liable for co-payments for all paid capped rental DME equipment claims.