Providers flock to Medicare forum on NCB

Sunday, April 15, 2007

WASHINGTON - A whopping 1,100 providers tuned in to CMS's Special Open Door Forum last week to review the final rule for national competitive bidding and to ask officials about everything from repairs for power wheelchairs to payments for rental equipment.

In the first 30 minutes of the 90-minute call, CMS officials reviewed the 10 metropolitan statistical areas (MSAs) and 10 product categories, as well the agency's timeline for implementing the program. Officials then walked through key provisions of the program, including accreditation. To submit a bid, officials stressed, providers must be accredited or be in the process of becoming accredited by one of the 10 approved organizations.

"There have been questions about accreditation," said CMS official Joel Kaiser. "All the suppliers in the 10 MSAs will be accredited before we enter into a contract for competitive bidding. We're going to closely monitor the accreditation process."

Officials answered questions for the remaining 60 minutes of the call. About a dozen providers asked questions, with several providers focusing on CMS's plans to ensure small provider participation.

Don Clayback asked whether CMS would consider modifying its timeline for implementing competitive bidding (The agency begins accepting bids in late April and plans to select winning bidders in December and implement a fee schedule April 1, 2008).

"Given that this has been going on for more than three years and the final rule took more than a year to be finalized, it seems like you're not giving (us) enough time to actually prepare and submit an educated bid," said Clayback, who heads up The MED Group's National Rehab Network.

CMS's response: "This has been a work in progress. There has been information about what our thoughts were on the program through a variety of sources--we had open public meetings with our PAOC committee; we had the proposed rule that everyone had a chance to look at--and we wanted to do a thorough job addressing all comments in our final rule. We are planning a Web cast to allow suppliers to learn all they need to do to submit a bid and a tool kit to assist suppliers through the bid process. (Providers) have an entire 60-day period, plus this pre-bidding educational period, to determine their bids and make a submission."

Other questions and answers:

Do suppliers have to bid on every product within a product category?
Yes. In the case of oxygen, that would include stationary concentrators, liquid and gas systems, portable liquid and gas systems, contents for liquid or gas, and supplies and accessories.

How will CMS select the winning small suppliers (those with revenues of $3.5 million or less in annual revenues)?
"When we're calculating the small provider target, our process calls to array the bids and then set the pivotal bid, which is the point at which we have enough suppliers to meet the beneficiary demand," a CMS official said. "The suppliers below that pivotal bid are the winning suppliers. Then we look at all the suppliers who are winning suppliers and see if there are any small suppliers. If we have enough small suppliers in the winning range to meet the small supplier target (30%), we are done. If we don't, then we will go above the pivotal bid starting with the supplier closest to the pivotal bid."

Can a network of suppliers with a total of less than $3.5 million in annual revenues qualify as a small supplier?

How will CMS handle payments for oxygen concentrators, which currently have a 36-month reimbursement cap?
"The competitive bidding program is separate from the standard payment rules, so the price in the contract will be paid for the entire contract period," a CMS official said. "That doesn't mean it continues as long as the rental period continues (i.e. 36 months). You'll have situations where someone who begins renting equipment right before the competitive bidding program, will still be renting equipment when the next round begins. The competitive bidding contracts run for three years, and after three years, they're recompeted. Anyone who's in the middle of a rental period when switching from one competitive bidding contract to the next--the same grandfathering rule applies. If you're a contract supplier for one round and then you lose in the next round of bidding, you can choose to be a grandfathered supplier for that item."

For rental equipment, will CMS make one payment or 13 monthly payments?
"Under competitive bidding, the supplier will submit a 'purchase' bid that we will use to calculate the rental payment, and the rental payment will be done the same way it's done today under the fee schedule world," said a CMS official. "We will take historic purchase payments under Medicare, and 10% of that purchase payment is the rental payment for the first three months and 7.5% of that purchase payment is rental amount for months 4-13."

Can a beneficiary go to a supplier other than the winning supplier for wheelchair repairs?
"The same thing that happens today would happen in this situation," said a CMS official. "A beneficiary could get a low quality product from a supplier and go to a different supplier to have the item repaired. There's no change as far as that's concerned. Right now there's no requirement that says the supplier who furnished the item initially is required to do the repairs on the item once the beneficiary owns the equipment."

But suppliers can't charge Medicare for labor, a provider pointed out.
"It has long been a Medicare guideline that, back to the reasonable charge date, a supplier's charges reflect all the costs of furnishing that item to that patient, including all services associated with furnishing that item," a CMS official said. "There's no difference under the fee-schedule world and there's no difference under competitive bidding, either."

How will CMS handle accessories and miscellaneous items for power wheelchairs?
CMS will put out to bid accessories that are part of the product category for complex rehab. (The covered codes in each category are listed at As for miscellaneous codes: "If there are certain accessories that don't fall into any of the codes in the product category and fall under a miscellaneous code, they would not be subject to the contract or competitive bidding," a CMS official said.

Can suppliers who aren't accredited grandfather patients?
"That's a tricky questions that requires us to prepare an answer in the form of a Q&A (to be posted on the agency's Web site)," a CMS official said. "We want to give you that answer as soon as possible, but we want to clear it up with all the organizations in CMS that deal with accreditation and competitive bidding."

Will CMS share beneficiary capacities for each MSA?
Yes. Before bidding begins in late April.

The call ended with CMS officials, again, stressing the need for providers to become accredited.

"Get accreditation moving," said an official. "If you haven't applied already, today is the time to do it."