Competitive bidding survey: Providers bid all over the place

 - 
04/16/2010

I just spent a few minutes reviewing the results of a competitive bidding survey that HME News recently conducted with The VGM Group.  The survey's goal was to gather enough data to allow us to estimate the winning bid amounts in all eight product categories in each of the first nine competitive bidding areas (CBAs).

So far, 93 providers from the different CBAs have taken the survey. To feel comfortable that the results reasonably represent the bid averages, we need about 200 providers to take the survey. Until we achieve that critical mass or get close to it, I'm not going to release the results. But they are interesting, and I will talk about them in general terms.

First of all, the bids are all over the place. In each of the eight categories--oxygen, standard power wheelchairs, rehab (Group 2), mail order, enteral, CPAP, hospital beds and walkers--bids range from 5% below the current allowable to, on average, 40% below. Then there are bids everywhere in between.

If I eyeball the survey and throw out bids that look like obvious mistakes (a 3,000% discount for oxygen, for example), here's what I notice:

--    The smallest bid variation appears to be for hospital beds.
--    The greatest bid variation appears to be for mail-order.
--    Walkers, oxygen, hospital beds and CPAP are the most popular bid categories.
--    The fewest providers bid on rehab and mail-order.
--    About 20 providers submitted bids for all eight product categories.
--    The biggest discounts appear to be in the Miami CBA
--    The smallest discounts appear to be in Riverside and Kansas City.
--    The smallest bid below the allowable for any product category was 1.45%.

We also asked providers that if they won a bid, would they use subcontractors. A majority said no. That's interesting because some of these same providers said that if they lose a bid, they want to become a subcontractor.

So there you have. Like I said, the survey results are not definitive, and most statisticians would dismiss the sample size as being too small to draw meaningful conclusions. That's probably a good thing.

Mike Moran

PS. If you are a bidding provider in one of the first nine CBAs and haven't taken the survey and would like to, go here. Responses are anonymous.