42 CFR 414.416 - Determination of competitive bidding payment amounts.

§ 414.416 Determination of competitive bidding payment amounts.

(a)General rule. CMS establishes a single payment amount for each item furnished under a competitive bidding program.

(b)Methodology for setting payment amount.

(1) The single payment amount for an item furnished under a competitive bidding program is equal to the median of the bids submitted for that item by suppliers whose composite bids for the product category that includes the item are equal to or below the pivotal bid for that product category. If there is an even number of bids, the single payment amount for the item is equal to the average of the two middle bids.

(2) The single payment amount for an item must be less than or equal to the amount that would otherwise be paid for the same item under subpart C or subpart D.

(3) In the case of competitions where bids are submitted for an item that is a combination of codes for similar items within a product category as identified under § 414.412(d)(2), the single payment amount for each code within the combination of codes is equal to the single payment amount for the lead item or code with the highest total nationwide allowed services multiplied by the ratio of the average of the 2015 fee schedule amounts for all areas (i.e., all states, the District of Columbia, Puerto Rico, and the United States Virgin Islands) for the code to the average of the 2015 fee schedule amounts for all areas for the lead item.

[ 72 FR 18085, Apr. 10, 2007, as amended at 81 FR 77967, Nov. 4, 2016]