Contract winners bemoan delay

Sunday, August 31, 2008

WASHINGTON--It’s unclear what compensation, if any, contract winners can seek now that national competitive bidding has been delayed.

“I feel cheated out of time, energy, money-you name it,” said Edward Eubanks, one of the owners of Charlotte Respiratory Solutions in Charlotte, N.C., one of the 10 competitive bidding areas. “We may have legal recourse, but who has the time, energy or money to sue the government?”

The bill that delays competitive bidding for 18 to 24 months states: “To the extent that any damages may be applicable as a result of the termination of such contracts, such damages shall be payable from the Federal Supplementary Medical Insurance Trust Fund.”

But that doesn’t mean providers have a right to any reimbursement from the government, said industry attorney Neil Caesar. It simply means that if damages have to be paid, they would be paid from that fund.

“There is nothing in there that has to do with paying out money to suppliers,” he said. “The effect of the legislation is the first step to create the application of damage reimbursement. They identified the fund, but not the process.”

Among the issues that would need to be addressed: Who would process compensation requests; how would the requests be evaluated; and what sort of damages would count?

“Are we talking about just actual out-of-pocket damages?” asked Caesar. “What about consequential damages?”
To be sure, it’s difficult for many contract winners to calculate an exact dollar figure on what bidding for and winning a contract has cost. John Serafin, vice president of St. Louis, Mo.-based Provider Plus, estimated he spent more than $20,000.

“We’re talking new billing systems, payers that needed notification, meals and lodging,” he said. “Do I think we should be reimbursed? Yes. Do I think it’s going to transpire? No.”

All was not lost for providers willing to look at the bright side.

“We spent a lot of money to get accredited in the process, but we feel good about that,” said Scott Williams, vice president of operations for Piedmont, S.C.-based Grove Medical. “Ultimately, we are happy about the delay.”