CMS teleconferences key on competitive bidding

Sunday, June 10, 2007

WASHINGTON - CMS held three national competitive bidding teleconferences last week. During the free calls, officials with Palmetto GBA, the agency's Competitive Bidding Implementation Contractor (CBIC), reviewed the application and bidding process, financial requirements and product categories. They also answered questions.

Applying and bidding
The bid submission process involves two forms: Form A (application) and Form B (bids).

For Form A, officials noted:
* Providers must bid as an individual supplier, a common ownership supplier or a network of suppliers. CMS considers two or more suppliers commonly owned if one or more of the suppliers owns at least 5% of one of the others. Providers must include in their applications location-specific information on each commonly owned provider.
* Providers bidding as a network must have a primary provider who completes one Form A on behalf of all providers.
* After completing Form A, providers are directed to a home page that states their status ("incomplete" means a provider hasn't filled out all the required fields; "submitted" means a provider has filled out all the required fields, but the CBIC hasn't received his hard-copy documentation package; and "complete" means a provider has filled out all the required fields and the CBIC has received his documentation package).

For Form B, officials noted:
* Providers must submit a separate Form B for each product category they plan to bid.
* For accessories, providers need to enter only one manufacturer, model name and model number.

To modify their application or bid, providers must select the correct form (A or B) then the appropriate section.

"It's very important that you click update," said an official. "We've had several calls where they didn't click update and their information was lost."

Questions answered during the call included:
* Clarify "time in business." It refers to the time that a provider has been supplying DME through its current location, not the time since he received an NSC number.
* Clarify "total estimated capacity." It's the "capacity for units by HCPC code that you're currently supplying plus any additional capacity that you'll be capable of providing for the year," said an official.
* Can a chain store submit bids only for specific locations? If a provider is commonly owned, he needs to submit one Form A and include information on all locations. "When contracts are awarded, the contracts will go to each location," said an official. "(Per) the contract, each location is required to furnish all bid items. You can't have 20 stores in a chain and only submit applications for five of those stores. It must be for all locations."
* How will CMS validate the capacity stated by providers? "We will validate that the supplier has the ability to expand the business by reviewing financial information and other aspects," an official said.
* Can you submit a different bid for the same product in different CBAs? Yes.
* Does product utilization represent dollars or the number of patients? It represents allowed services.

CBIC officials stated that they would post additional information online about common ownership.

Financial requirements
Officials discussed the financial documents that different types of providers (i.e. individual, limited partnership, wholly-owned subsidiary) have to submit. In general, providers must submit a section of their tax returns, a balance sheet, a statement of cash flow and a statement of operations for the past three years. They must also submit a current credit report and score.

New providers must submit projections for any year they haven't been in business for the past three years. The primary provider in a network must submit financial information for each member in one complete package.

For credit reports and scores, officials announced that they have added Dun & Bradstreet to the list of companies that providers can use. The others: Equifax, TransUnion and Experian. If a provider is a Schedule C filer, a sole proprietor or another small partnership, CMS will accept personal credit reports and scores.

Officials noted that financial documents like balance sheets don't need to be certified by accountants; they need to be certified "accurate" by the providers themselves.

Product categories

Items chosen for NCB in each CBA were chosen based on allowed charges and utilization; annual growth and expenditures; number of suppliers per beneficiary in each CBA; savings; and the DMEPOS NCB project and report and studies conducted by CMS and other federal agencies.

The items included in each product category are related and are used to treat similar medical conditions or patient populations.

Some accessories for PMDS are used with PMDs in category 2 and category 3. Therefore, these accessory items, such as batteries and tires appear in both categories.

Oxygen accessories such as regulators or mouthpieces that have a low utilization or volume were included because it is anticipated that Medicare payment for accessories for beneficiary-owned oxygen equip will start to increase once title is transferred.

Suppliers are not required to have the capability to reach all or any percentage of estimated demand. On the application, they should report total estimated annual capacity for furnishing each item within a product category per CBA.

Mail order diabetes supplies
Beneficiaries who reside in a CBA may purchase supplies from either a mail order contract supplier, who will be reimbursed at the single payment amount, or a non-contract supplier whose supplies are not furnished via mail order basis. Mail order refers to items ordered via phone, Internet or email and delivered by common carries such as the U.S. Postal Service, FedEx or United Parcel Service.

The geographic boundaries for mail order supplies may differ from other product categories so bidders should review the map and list of zip codes.

For capped rental and inexpensive or other routine items, beneficiaries can choose to continue renting from the current supplier, called a grandfather, who is not a contract supplier, or they may switch to a contract supplier. The grandfather does to have to contracted. This provision only applies to suppliers that are furnishing the items on a rental basis at the time NCB is implemented.

If a supplier agrees to be a grandfather supplier, he must serve all eligible beneficiaries who elect to receive items under a grandfathered arrangement. If a supplier declines, they must pick up equipment and the beneficiary must choose a contracted supplier. Grandfathered suppliers will continue to be paid the rental fee schedule amount until the item is no longer medically necessary; 13 months of continuous rental payments have been made; or total rental payments for the item are limited to fee schedule amounts.

Visit for transcripts of the calls.