Competitive bidding: CMS works to include small providers

Sunday, September 27, 2009

BALTIMORE - CMS officials discussed provisions to ensure that small suppliers get a crack at winning competitive bidding contracts, during a Special Open Door Forum Tuesday

Small suppliers are defined as having gross annual revenues--both Medicare and non-Medicare--of $3.5 million or less. If the supplier has multiple locations, the revenue is the combined total for all locations.

CMS has set a 30% target rate for small providers to be awarded contracts. That means, within a competitive bid area (CBA), CMS will identity the number of total qualified suppliers whose composite bids are at or below the pivotal bid amount and determine the number of contracts that must go to small suppliers. If not enough small suppliers in the CBA are at or below the pivotal bid, CMS will award contracts to qualified small suppliers above the pivotal bid until it meets the target number.

CMS officials outlined networking guidelines and financial documentation requirements to submit bid.


* Each member of a network must meet the definition of a small supplier and must meet all Medicare eligibility requirements.

* Individual members are not required to service the entire CBA but the network as a whole must be able to. Each network member must provide statements certifying that they cannot service the entire CBA independently.

* Each member's financial documents must be submitted together in one package.

* At the time the network submits its bid, its total market share cannot exceed more than 20% of Medicare volume in the CBA for the product category.

* Members can only join one network per category per CBA. Providers that are members of a network cannot bid independently for the same product in the same CBA.

It is important for networks to dot I's and cross T's, warned CMS officials.

"During bid evaluation, if it's determined that one network member doesn't meet one or more of the requirements, the entire bid is disqualified," said Cindy Dreher, content and policy lead for the CBIC. "If any financial documents are missing for any network member, the entire bid is disqualified."

Financial documentation

* Includes most recent year of financial statements, including income statement, balance sheet and statement of cash flow; along with the revenue expense portion of the provider's tax return; and a credit report and credit score less than 90 days old.

* Documents must be submitted in loose page format--no folders, staples or clips--and the bidder number must be included on each page.

* Statements and tax extracts must be for the same accounting period, i.e. if the financial statement is based on a calendar year, the tax information must be also.

Last year in Round 1, many providers were disqualified due to missing documentation. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires a covered document review. Providers that submit financial documents by the covered document review date (CDRD) deadline will be notified within 45 days if they are missing any documentation. Bidders will have 10 business days to submit any missing documents. Providers cannot submit changes to bid amounts or other changes after bid window closes. The review will only determine if something is missing--not check for accuracy or completeness.

The actual CDRD will be announced when the bid window opens. The bid window target date is Oct. 21 and the CDRD will be set for either 30 days before the close of bidding or 30 days after the start of bidding--whichever is later.

Callers had a few questions for CMS officials, including:

* Can I send in a draft before the CDRD so it can be reviewed and then submit another version later? "As long as the bid window is open, you can submit additional documentation," said Dreher.

* Did I understand that you can bid as a network and as an individual supplier? "Yes, but it would have to be for a different product category in the same CBA or the same product category in a different CBA," said Dreher.

The next forum, on bid evaluations, is scheduled for Sept. 29.