Feds 'double and triple check' competitive bids

Thursday, April 29, 2010

BALTIMORE - Some providers who submitted bids for Round 1.2 of national competitive bidding received an email from the program on Wednesday, seeking proof of licensure.

Under the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), bidders must meet all state and local license requirements to provide the products and services within a competitive bidding area (CBA). The rules vary by product and state.

"They are double and triple checking this time," said Walt Gorski, vice president of government relations for AAHomecare. "We commend CMS for ensuring that anybody who is up for consideration has appropriate licensing."

In Round 1 of the bidding program, many companies won contracts for products they had never provided or in geographic regions where they lacked necessary licensure.

Providers who received the notification from the Competitive Bidding Implementation Contractor (CBIC) had until midnight, EST on April 29 to fax in the requested documentation. The short response time raised some eyebrows, but it's probably for good reason, said Alan Morris, a regulatory analyst with the VGM Group.

"I think the CBIC's intent was probably not to allow people to run out and get a license," said Morris. "It's sufficient time if they already have it on file."

Late the previous week, the CBIC began its "bona fide bid" verification process. Providers received emails alerting them that they could receive requests for invoices or other information to back up their bids.

The way it works: the CBIC has a "threshold" amount for each HCPCS code included in competitive bidding. Any bid that comes in under that threshold is flagged for follow up. The CBIC started with mail order diabetes supplies with other categories to follow.

Ideally, the system will prevent most of the low-ball bids that plagued the industry last time around, said Mark Higley, vice president of development for the VGM Group.

"That's why we wound up with (an average cut of) 26% last time," he said. "We believe it's going to be even greater than that this time around for those that are gaming the system and hoping their contract will be accepted."

Still, invoices alone aren't enough to support a bid's viability, say industry stakeholders who remain vexed by CMS's lack of transparency.

"What about the costs of infrastructure and administration," said Gorski. "We have no clue how CMS is calculating that and we don't know whether or not the selected bid are going to be supportable over the long term."