Competitive bidding analysis

Sunday, July 8, 2007

Suppliers are required to provide CMS their current and projected capacity to service beneficiaries within a competitive bidding area. Suppliers may expand their capacity by subcontracting some of their services such as equipment deliveries to another supplier. Suppliers who decide to use subcontracting as a tool to expand their capacity will remain responsible for meeting competitive bidding standards and for ensuring the quality of the services that beneficiaries receive. Consequently, contract suppliers assume the responsibility for the ongoing monitoring of the quality of the services their contractors furnish to beneficiaries in a competitive bidding area (CBA).

Suppliers must state in their response to the request for bids whether they intend to expand capacity using subcontractors. If they do, suppliers must include with their bids letters of intent clearly identifying the parties to the subcontract. The letters of intent must be signed by the authorized official of each party. The letters of intent must also clearly identify the scope of the subcontractors’ services and the anticipated length of the subcontract. Subcontractors must agree to provide the services identified in the letter of intent; they must also agree to abide by federal and state privacy and security requirements.

All Medicare enrolled suppliers are precluded from contracting with individuals or entities that are excluded from Medicare or Medicaid or other federally funded programs. Additionally, bidders must disclose in their response to the request for bids any prior or current legal actions, sanctions, revocations from the Medicare program, program related convictions, exclusion or debarments against any of its contractors.

Healthcare attorney Asela Cuervo is based in Washington, D.C.