[Title 42 CFR 414.402]
[Code of Federal Regulations (annual edition) - October 1, 2007 Edition]
[Title 42 - PUBLIC HEALTH]
[Chapter IV - CENTERS FOR MEDICARE]
[Subchapter A - GENERAL PROVISIONS]
[Part 414 - PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES]
[Subpart F - Competitive Bidding for Certain Durable Medical Equipment,]
[Sec. 414.402 - Definitions.]
[From the U.S. Government Printing Office]


42PUBLIC HEALTH32007-10-012007-10-01false414.402Sec. 414.402PUBLIC HEALTHCENTERS FOR MEDICAREGENERAL PROVISIONSPAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICESCompetitive Bidding for Certain Durable Medical Equipment,
Sec. 414.402  Definitions.

    For purposes of this subpart, the following definitions apply:
    Bid means an offer to furnish an item for a particular price and 
time period that includes, where appropriate, any

[[Page 37]]

services that are directly related to the furnishing of the item.
    Competitive bidding area (CBA) means an area established by the 
Secretary under this subpart.
    Competitive bidding program means a program established under this 
subpart within a designated CBA.
    Composite bid means the sum of a supplier's weighted bids for all 
items within a product category 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.
    DMEPOS stands for durable medical equipment, prosthetics, orthotics, 
and supplies.
    Grandfathered item means any one of the following 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 Sec. 
414.408(j):
    (1) An inexpensive or routinely purchased item described in Sec. 
414.220.
    (2) An item requiring frequent and substantial servicing, as 
described in Sec. 414.222.
    (3) Oxygen and oxygen equipment described in Sec. 414.226.
    (4) Other DME described in Sec. 414.229.
    Grandfathered supplier means a noncontract supplier that chooses to 
continue to furnish grandfathered items to a beneficiary in a CBA.
    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, and includes the 
services directly related to the furnishing of that product to the 
beneficiary. Items that may be included in a competitive bidding program 
are:
    (1) Durable medical equipment (DME) other than class III devices 
under the Federal Food, Drug, and Cosmetic Act, as defined in Sec. 
414.202 of this part and further classified into the following 
categories:
    (i) Inexpensive or routinely purchased items, as specified in Sec. 
414.220(a).
    (ii) Items requiring frequent and substantial servicing, as 
specified in Sec. 414.222(a).
    (iii) Oxygen and oxygen equipment, as specified in Sec. 
414.226(c)(1).
    (iv) Other DME (capped rental items), as specified in Sec. 414.229.
    (2) Supplies necessary for the effective use of DME other than 
inhalation drugs.
    (3) Enteral nutrients, equipment, and supplies.
    (4) Off-the-shelf orthotics, which are orthotics described in 
section 1861(s)(9) of the Act that require minimal self-adjustment for 
appropriate use and do not require expertise in trimming, bending, 
molding, assembling or customizing to fit a beneficiary.
    Item weight is a number assigned to an item based on its beneficiary 
utilization rate using national data when compared to other items in the 
same product category.
    Mail order contract supplier is a contract supplier that furnishes 
items through the mail to beneficiaries who maintain a permanent 
residence in a competitive bidding area.
    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.
    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.

[[Page 38]]

    Network means a group of small suppliers that form a legal entity to 
provide competitively bid items throughout the entire CBA.
    Noncontract supplier means a supplier that is not awarded a contract 
by CMS to furnish items included in a competitive bidding program.
    Physician has the same meaning as in section 1861(r) of the Act.
    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 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.
    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.

[72 FR 18084, Apr. 10, 2007]