The “Grandfathering” Clause: How to Keep Your Patients If You Lose the Bid

Answer Summary:

If you reject the contract offer (or were not offered one), you become a “Non-Contract Supplier.” However, under the Grandfathering Rule, you may be allowed to continue renting equipment (like Oxygen or Wheelchairs) to existing patients who were on service before the contract period began (Jan 1, 2027). You can continue to bill for these patients until the rental cycle ends (e.g., the 36-month cap for Oxygen) or the patient no longer needs the item. This rule prevents immediate revenue collapse, but requires strict election procedures and patient notifications.

Introduction:

“I lost the bid. Do I have to go to 500 homes and pick up my equipment on December 31st?”

This is the nightmare scenario.

The Answer: No.

To protect beneficiaries from disruption of care, CMS allows non-contract suppliers to become “Grandfathered Suppliers.” This is your bridge to survival.

How Grandfathering Works

• The Eligibility: It only applies to Rented Items (Oxygen, CPAP, Hospital Beds, Wheelchairs) where the patient was on claim before January 1, 2027.
• The Payment: You are paid the Single Payment Amount (SPA)—the same price the winners get. You do not get to keep your old higher rate.
• The Condition: It is an “All-or-Nothing” election per product category. You must accept all your grandfathered Oxygen patients or none. You cannot cherry-pick the profitable ones and dump the rural ones.

The “Grandfathering Notification”

You must formally elect to be a Grandfathered Supplier.

• The Deadline: This usually must be done within 30 days of the contract period start.
• The Patient Letter: You are required to send a letter to your patients stating: “We are no longer the contract supplier, but we have chosen to continue servicing you.”
• The Outcome: This builds loyalty. Patients hate switching providers. If you keep them, you keep the revenue stream (and the resupply revenue for CPAP).

The “Essential Accessories” Rule

• The Trap: If you grandfather the Oxygen Concentrator, you must also provide the tubing and masks. You cannot say “I’ll rent the machine, but go buy your masks from the Winner.”
• The Opportunity: If you keep the CPAP rental patient, you also keep the mask resupply revenue, which is often where the real profit lies.

WWS Value Proposition: We Manage the Election

Wonder Worth Solutions helps you scrub your patient list to identify “Grandfather-Eligible” claims. We draft the Patient Notification Letters and handle the election paperwork with CMS to ensure you keep your residual revenue legally.