What are logistics of next round of bidding?

WASHINGTON – CMS’s next round of competitive bidding, as currently proposed, could be unfairly rigged to guarantee the agency sees savings, AAHomecare's Kim Brummett fears.  

To set the bid ceiling for products that have previously been part of the program, CMS is proposing using the single payment amount for the last round – so, 2019 – plus a CPI-U update every year, plus 10%. That’s, essentially, the current fee schedule, says Brummett, senior vice president of regulatory affairs for the association.  

Using an industry-developed bid calculator, she says that means for oxygen concentrators (E1390) in Aiken County, S.C., for example, there’s a bid ceiling of $92.44 for this next round of the program vs. $189.86 for the previous round of the program – or a bid ceiling that’s about 51% lower.  

What’s more, due to lead-item pricing, providers will again see significant reductions for non-lead items in a category, even if they bid just one penny below the bid ceiling for the lead item. Except, in this next round of the program, they won’t have the ability to build as much of a buffer into their bid for the lead item due to the low bid ceiling.  

“It’s a nightmare,” Brummett said. “To me, this is one of THE biggest issues.”  

Brummett also noted that there is nothing in CMS’s proposal about bona fide bids. In previous rounds on the program, CMS sent providers letters asking them to explain how they planned to furnish products at the bid amounts they submitted and to provide supporting documentation substantiating those bid amounts. In the last round, CMS conducted bona fide bid checks on the lead item. In this next round, since the bid ceiling for the lead item is so low, all non-lead items are significantly reduced and should be verified, she says. 

“Will they look to see if you’ve ever done business in California before if you’re bidding in California?” she said. “Or if you’ve ever billed for beds when you are bidding on the bed category? And the non-lead items, that is concerning.”  

Brummett also noted that it appears CMS will only be requesting and reviewing credit scores in this next round of the program. Previous rounds required providers to submit numerous financial documents to substantiate their viability.  

Surety bonds, however, will remain part of this new round of the program. “Because that’s the law,” Brummett said. 

Related: Stakeholders mobilize against CMS bidding rule & Providers deconstruct CGM bid plan.