Bidding update: Capacity, licensure

Friday, November 15, 2013

BALTIMORE – The financial capacities that contract suppliers submitted as part of their bids don’t hold much weight, based on new guidance from the Competitive Bidding Implementation Contractor (CBIC).

Contract suppliers must continue to provide equipment and services, even if they’re beyond their submitted capacities, the CBIC now states.

“If you are getting inundated and being asked to provide five times the products you said you could—there’s an argument for that, but it’s just not in the final rule,” said Kim Brummett, senior director of regulatory affairs for AAHomecare.

The CBIC originally stated that providers could decline referrals after they reached their capacities, with proper notice to the agency.

With so many contracts awarded to out-of-state providers, the fear is that local contract suppliers risk getting inundated with referrals, say stakeholders.

“The practical difficulty is that it’s the small local providers that are getting the calls because people don’t want to go to these long-distance firms,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “They don’t call Texas to get a walker in Ohio.”


Licensure issues with the contract suppliers for the Round 1 re-compete are starting to trickle in state by state.

“Twenty-three percent of the contracts in Ohio were awarded to firms that do not appear to be licensed or registered with the appropriate agency,” said Bachenheimer.

In Pennsylvania, it appears only 48% of contracts for the general HME category and 56% of contracts for standard mobility were awarded to providers with proper licensing, according to the Pennsylvania Association of Medical Suppliers (PAMS).

A big reason why many contract suppliers in Pennsylvania don’t meet the requirements: The state in 2012 stopped issuing disinfection licenses—required to provide beds and wheelchairs—to out-of-state providers. In both Round 2 and the Round 1 re-compete, a large number of contracts were awarded to out-of-state providers. PAMS believes those contracts will need to be voided.

“This will have a significant impact on competitive bidding contract holders and Medicare beneficiaries in both the four Round 2 bid areas and the Round 1 re-compete area in Pittsburgh,” PAMS stated a letter to CMS Administrator Marilyn Tavenner.