Competitive bidding update: CMS awards new contracts, finalizes changes to program

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Friday, November 4, 2016

WASHINGTON – CMS on Nov. 2 announced the contract suppliers for the latest round of its competitive bidding program.

For Round 1 2017, CMS says it has executed 182 contracts, 92% of the contracts it offered. The contracts will run from Jan. 1, 2017, through Dec. 31, 2018.

CMS says 92% of the contract suppliers are already established in the competitive bidding area, the product category, or both. It says 93% of small suppliers, those with gross revenues of $3.5 million or less, accepted offers.

Contract suppliers for each product category in each CBA can be found in the Supplier Directory at www.medicare.gov/supplier.

CMS announced the new single payment amounts for Round 1 2017 on Sept. 8.

Contract suppliers will see an overall reduction in Medicare reimbursement of 5.2% from the Round 1 re-compete to Round 1 2017, according to analysis by AAHomecare. The product categories with the steepest cuts* are TENS devices at 45.1%, followed by CPAP devices at 18.5%.

CMS finalizes changes to bid program

WASHINGTON – CMS issued a final rule Oct. 28 with a number of changes to competitive bidding, including establishing bid limits for future rounds of the program based on the fee schedule rates before they were adjusted.

Other changes:

·      Requiring bidding entities to obtain a bid surety bond from an authorized surety on the Department of the Treasury’s Listing of Certified Companies for each competitive bidding area associated with their bid. The bond must be finalized at $50,000 and must indicate the CBA specific to that bond.

·      Requiring that a contract will not be awarded to a bidding entity unless the entity meets applicable state licensure requirements. “This revision does not reflect a change in policy as CMS already has a regulation in place that requires suppliers to meet applicable state licensure requirements,” the agency stated.

·      Extending the appeals process to all breach-of-contract actions that CMS may take under the competitive bidding program, rather than just for contract termination actions. CMS will issue a notice of breach of contract, which will include any breach-of-contract actions the agency intends to take.

The final rule also includes a provision addressing inverted prices for similar items with different features under competitive bidding prior to adjusting fee schedule amounts paid in non-bid areas. CMS will use the weighted average of the prices for the similar items in a product category as the revised price for the items that will then be sued to adjust the fee schedule amounts.