Bid Smart Summit Breaks Down Competitive Bidding

*Updated June 7, 2019 with link to presentation.

NASHVILLE (June 5, 2019)—Some 130 providers from around the country gathered Wednesday in Nashville, Tennessee, for the Bid Smart 2019 Summit, sponsored by the VGM Group, AAHomecare, the Council for Quality Respiratory Care (CQRC), At Home Services and the Healthcare Nutrition Council. The interactive summit covered the details of Round 2021 and helped providers learn how to approach bidding fully informed.

The room was split roughly 40/60 with repeat and new bidders. Of those who had bid before, only one company said they planned to change or add bidding categories in the upcoming round.

There are 16 categories in this round of competitive bidding. The Centers for Medicare & Medicaid Services (CMS) added non-invasive home ventilators and several categories of off the shelf orthotic braces to this round.

During the six-hour summit, industry leaders led the providers through the bidding basics, including a timeline for bidding.

“Spending six hours talking about Round 2021 competitive bidding is tough. For those of you who are experienced [in bidding], I feel sorry for you. For those of you who are new [to the process], I also feel sorry for you,” said Kim Brummett, Vice President Regulatory Affairs, American Association for Homecare, in her introductory remarks. 

Timeline for Bidding

The industry is currently in a “gap period” that began Jan. 1, 2019. During this time, any willing provider is permitted to supply Medicare beneficiaries. The registration period for Round 2021 opens June 10, 2019 and the bidding window opens July 16 and closes on Sept. 18, 2019.

“We pushed for the bidding window start date to be pushed back in light of several changes to the program, including lead item pricing,” said Cara Bachenheimer, Government Affairs Practice, Brown & Fortunato Kim Brummett.

On Bid Bonds

Mark Higley, vice president of regulatory affairs for VGM Group said, “Stop calling them surety bonds and start calling them bid bonds. Surety bonds were a method to recoup overpayments years ago.”

Each company wishing to place a bid will need a $50,000 bond per competitive bid area (CBA). This “pay-to-play” methodology is meant to keep out those providers who might drive the price artificially low. If a provider cannot supply a product in a certain CBA, then that supplier should not bid in that area. Failure to accept the bid if awarded results in a penalty from the bond company.

Lead Item Pricing

Lead item pricing is designed to streamline the bidding process. Instead of bidding on all130 Healthcare Common Prodecure Coding System (HCPCS) codes, providers bid on 16 representing the primary items in each category. Bids for the lead items will be used to determine single payment amounts for other, non-lead items such as accessories and supplies.

Bidders must analyze the impacts of the lead item bid on all the non-lead items in the product category to ensure that the resulting non-lead item prices are sustainable for business.

“Put in a bid that makes sense for your business. Bid smart,” said Higley. “As a contractor, you are required to provide every single item in a product category. As a provider, you need to figure out how to do that at a profit. The mechanics have changed, so this should result in a more rational program.”

CMS has raised the bid ceiling almost 2.5 times for this round. The rate is based off 2015 Medicare rates plus inflation. Attendees were also walked through bidding calculators on dmecbpeducation.com, including new reverse calculators. The reverse calculators allow providers to work backwards from the reimbursement for a non-lead item to be profitable to get the lead item price.

Find the full presentation here.