Bidding brouhaha: Process continues to generate controversy

Sunday, March 30, 2008

WASHINGTON - Round 1 bidders swamped the phone lines of industry associations last week with complaints of improperly disqualified bids. And on Wednesday, AAHomecare urged CMS to push back the deadlines for accepting contracts (April 3) and for kicking off the national competitive program (July 1).

"We want to ensure that suppliers are treated fairly, but that the education window isn't squeezed to such an extent that suppliers and beneficiaries won't be able to react to the changes," said Walt Gorski, AAHomecare's vice president of government affairs. "We also want to ensure the integrity of the program by ensuring that CMS has calculated allowables appropriately."

By Friday the association had more than 150 examples of unfairly disqualified bids in which they could verify that providers had supplied the necessary documentation.

The most common error codes were:
* BSE-4: Bidder did not submit the applicable financial documentation specified in the request for bids.
* BSE-3: Bidder did not meet applicable quality standards/was not accredited by a CMS-approved accreditation organization.
* CO-1: Bidder did not submit a single bid for commonly-owned or controlled suppliers.

CMS did not respond to a request by HME News that it address industry concerns that hundreds of Round 1 providers were improperly disqualified.

The agency disqualified most providers for allegedly not including the necessary financial documentation with their bids, say industry leaders. The VGM Group has fielded a couple of hundred calls from members whose bids were disqualified.

"It's certainly unbelievable that that many companies would have made that type of an error on the most important thing in their business in the last 15 years," said Kelly Wolf, VGM's vice president of key accounts. "The companies I've talked with hired outside firms to review documentation requirements before the bids were sent in."

Rob Brant, CEO of City Medical Services in Miami Beach, Fla., said he did just that, yet the CBIC disqualified his bid.

"Our accountant provided us with (the financial documents) and then we went through a lawyer to certify our bid," he said. "I said, 'Let's spend a few thousand dollars to make sure it's proper.'"

Jack Marquez, owner of Cobra Medical Equipment in Miami, bid as part of a network that was disqualified.

"All my papers were there," he said. "The lawyers checked it. If they found my 2004 and 2006 income statements, why not my 2005?"

Marquez and Brant are spearheading efforts in Florida to unite disqualified providers and have reached out to state associations across the country.

"We're up to 175 providers in South Florida (that were disqualified)," Marquez said. "We want to unite everyone and fight it. If we are going to do a lawsuit, it should be one big one."

Before any lawsuits can be filed, there are legal questions to answer, said Jeff Baird, a healthcare attorney with Amarillo, Texas-based Brown & Fortunato.

"We have a statute by Congress that says there is no administrative or judicial review regarding the awarding of contracts," he said. "The legal question is whether this prohibition extends to the situation where an application is rejected as a result of the CBIC's mistake."

So far, complaints are being handled by the CBIC on a case-by case basis, said Seth Johnson, vice president of government affairs for Pride Mobility.

"In many cases the CBIC has acknowledged that, 'We do see that information and we'll get back to you within 48 hours on what the determination is,'" he said. "Some providers have been told they will have a response within 48 hours. There are others who have been told that their request will be responded to in 30 days, but 30 days seems like a long time. It seems like you'd like to wrap that up before they announce the winners."

AAHomecare asks providers who believe they were unfairly disqualified to fill out the form on the front page of the AAHomecare Web site ( to help the association document complaints. Complaints should also be submitted to the CBIC, the provider's Representative in Congress and U.S. Senators.