Déjà vu: Concerns resurface in Round 2 re-compete

As stakeholders analyze list of contract suppliers, they worry about, among other things, out-of-staters
Friday, April 29, 2016

WASHINGTON – Industry stakeholders have begun the monumental task of analyzing the newest competitive bid contract suppliers.

“We’re trying to get a feel for who won the most contracts in what product categories,” said Kim Brummett, vice president of regulatory affairs for AAHomecare.“One of the things we are looking at, since the pricing was lower, are they mostly the big nationals or are we still dealing with mom and pops that won hundreds of contracts.”

CMS named the contract suppliers for the Round 2 re-compete of competitive bidding at the end of the business day on Thursday. The agency said it has executed 586 contracts for seven product categories. The contract providers have 2,200 locations to serve Medicare beneficiaries.

The agency also awarded nine contracts for diabetes supplies as part of its national mail-order program.

Stakeholders will also be looking to see whether the contract suppliers meet any and all licensure requirements—one of the rules of the program that CMS failed to ensure in the original Round 2.

“I’d be very disappointed if it was a ton of licensure issues,” said Brummett. “We saw a lot more scrutiny at the CBIC this time, but we’ll do our due diligence and work with our state leaders to look at licensure.”

Also under scrutiny: whether contracts were awarded to suppliers that can reasonably be expected to serve the CBAs in which they won contracts. CMS says 92% of contract suppliers are already established in the bid area, the product category, or both—a number with which stakeholders have said they disagree with.

“We had the out-of-state issue last time, (with contracts going) to people who were not really committed to serving the community,” said Cara Bachenheimer, senior vice president of government relations for Invacare.

Ohio, where Invacare is based, was one of many states that saw contracts awarded in the original Round 2 to companies that were hundreds or even thousands of miles away—a problem that, at first glance, looks like it is being repeated in the Round 2 re-compete.

“I just opened up the Northeast nebulizer file and it’s Florida, Texas, Florida, Mississippi, Puerto Rico, Alabama,” said Bachenheimer. “That’s just the first page.”

Once the analysis is done, stakeholders will use any problems they uncover in their efforts to get a delay in a second round of cuts in non-bid areas on July 1. S. 2736, introduced March 17, currently has 23 co-sponsors, including the additions last week of Sens. Susan Collins, R-Maine, Tim Kaine, D-Va., and Mark Warner, D-Va.

“That’s having some strong movement,” said Brummett. “We’ve got lots of people talking on the Hill. If this paints the picture that you still have the average supplier being 500 miles away I think it gives even more credence to say you can’t be doing that.”

CMS goes live with the Round 2 re-compete and national mail-order programs on July 1.