'We hope CMS will give providers the benefit of the doubt'

Thursday, January 31, 2008

BALTIMORE - An honest mistake made by some HME providers could keep them from participating in the first round of national competitive bidding.
In late December, CMS sent letters to providers who made the following mistake when assembling their bids: Instead of submitting the acquisition cost of a product, they supplied the monthly rental amount. By doing this, the providers appeared to be submitting low-ball bids, which CMS wants to prevent.
Several providers reported to The VGM Group that they'd received a certified letter from Palmetto GBA, the competitive bidding implementation contractor. The letter notified the providers that CMS questioned the legitimacy of one or more bids, and that the providers must respond on or before Jan. 7, 2008, or risk disqualification in the product category in question.
The letter cites CMS's authority to accept only "bona fide" bids--that is, bids that are rational for a particular product. Generally, this is interpreted as a bid that exceeds the acquisition cost for the item, said Mark Higley, VGM's vice president-development. (This prevents bidders from extreme "low-balling" to effectively guarantee that their bid amounts will be under the pivot--or cutoff--point in the overall array of bids.) Accordingly, the letter demands proof of the bidder's acquisition costs. Bidders could submit this proof via fax (the recommended method, according to the contractor) or via certified mail.
"We hope that CMS will err on the side of giving the supplier the benefit of the doubt and allow for a correction to be made on a program that has such drastic consequences," said Walt Gorski, AAHomecare's vice president of government affairs.
CMS has advised recipients of the letter that "it is important to note that bid amounts may not now be revised."