CMS on round two of competitive bidding: ‘We’re not quite there yet’

Tuesday, January 8, 2008

WASHINGTON – CMS hasn’t announced the winning bidders for the first round of national competitive bidding yet, but the agency on Tuesday plowed ahead with the second round of the program anyway, releasing 70 additional cities and eight product categories.

“It’s amazing that CMS thinks it’s going to carry off the second round without having carried off the first round yet,” said industry consultant Mary Ellen Conway, president of Capital Healthcare Group in Bethesda, Md.
“No business would take on a second process if it had no idea whether the first process worked and was successful.”

The 70 metropolitan statistical areas (MSAs) include New York City, Chicago and Los Angeles, three big cities that CMS omitted from the first round. The product categories mirror those for the first round, minus mail-order diabetes supplies and support surfaces.

At an Open Door Forum today, CMS’s Joel Kaiser told listeners that the agency would release additional details on the second round, including applicable zip codes within MSAs and HCPC codes within product categories, sometime this spring.

“We’re not quite there yet,” he said. “The important thing is that we need to have suppliers begin getting accredited in the 70 MSAs, and we need them to start being aware that this is where we’re going, so that they can start getting their businesses ready and start making decisions.”

Industry sources were surprised that CMS nixed mail-order diabetes supplies for the second round. But then again, the agency plans to put that product category out to bid nationally in 2009, according to industry attorney Asela Cuervo.

Another surprise: There were several big cities, like Seattle and Boston, that weren’t included in the 70 MSAs; industry sources aren’t sure why. Then there were other cities included that they thought would have been part of the first 10 MSAs.

Few industry sources dared to predict whether the bid registration process would go more smoothly the second time around.

“I don’t think it’s going to be an easy transition into round two,” said Alan Landauer, chairman of AAHomecare. “But from what we’ve been told, they’ve fixed most of the problems.”