NCB draft - AAHomecare highlightskey aspects of proposal

Wednesday, May 31, 2006

WASHINGTON - In a document posted to its Web site April 26, AAHomecare boiled down CMS's 203-page proposal for national competitive bidding into nine key categories.
implementation contractors
Competitive Bidding Implementation Contractors would perform functions like preparing requests for bids, performing bid evaluations, selecting qualified suppliers and setting payment amounts in bid areas. CBICs would also assist CMS and the DMERCs in monitoring the program.
Payment rules
The "single payment amount" would become the new Medicare payment basis. Beneficiaries who use oxygen or capped rental equipment will have the opportunity to continue using their existing provider, even if the provider is not a winning bidder. A provider who agrees to be a grandfathered provider must agree to do so for all beneficiaries it serves, unless the beneficiary desires to transition to a winning bidder or a "contract supplier." The grandfathered provider must agree to accept the competitive bid payment amount for oxygen and equipment in the frequent and substantial servicing category. For capped rental equipment, the grandfathered provider would continue to receive the Medicare fee schedule amount for the rental period.
bid areas in 2007
CMS proposes a methodology for selecting the competitive bid areas as follows:
- Select the top 50 metropolitan statistical areas (MSAs) using Census Bureau population data published as of July 1, 2005, and exclude the top three: New York, Los Angeles and Chicago.
- Eliminate the 25 MSAs that have the fewest DMEPOS allowed charges for items furnished in 2004.
- Score the remaining 25 MSAs on combined rankings for the following: DMEPOS allowed charges per fee-for-service beneficiary, and ratio of providers to beneficiaries using DMEPOS in 2004.
bid areas in 2009
CMS would modify the formula for selecting MSAs as follows:
- CMS would not exclude the three largest MSAs or MSAs that cross DMERC boundaries, and it would not limit the number of MSAs that can be selected from any one state.
- CMS would use the most current list of MSAs published by the Census Bureau.
- CMS would use the same criteria it uses in 2007, but it would use data from 2006.
Nationwide, regional competitive programs
CMS proposes to establish a nationwide or regional competitive bidding program after 2010 for items that are furnished by mail order like diabetic testing supplies.
Item selection
The proposal identifies criteria that CMS will use in selecting products for competitive bidding. CMS will begin with high-cost, high-volume items, and those that have the greatest potential for savings.
Quality standards, accreditation
All suppliers will have to meet quality standards. The standards will be administered by an independent accreditation organization designated by CMS. CMS will allow a grace period for unaccredited providers who submit bids to attain accreditation. Providers would also be required to meet eligibility requirements in the current CMS supplier and financial standards.
Bid evaluation
CMS will select bidders using a formula that determines how many bidders will be required to service beneficiary needs in the competitive bidding area. The winning bids will be selected using a "composite bid" of the supplier's bids for each item in a product category. The composite bid will be the weighted sum of the supplier's bid for each item in the product category. CMS would select the winning bid amount, or "pivotal" bid, based on "where expected combined capacity of the bidders is sufficient to meet the expected demands of the beneficiaries for items in a product category." All bidders whose bid is at or below the pivotal bid amount would be selected as winning bidders.
Payment amounts
CMS will use the following principles:
- All winning bid amounts will be used to establish the single payment amount.
- Single payment amounts cannot be higher than the current payment under the existing fee schedule.
CMS would calculate the average of the winning bids for each item. Then CMS would calculate the average of the composite bids by taking the sum of the composite bids for all contract suppliers in a competitive bidding area and dividing it by the number of contract suppliers. Finally, CMS would apply an adjustment factor that would bring all individual bids up to the pivotal bidder's composite bid.