CMS Contract Chart Sparks Blaze of New Questions

ATLANTA

Hoping for a helpful tool to evaluate competitive bidding contract offers, providers instead reaped a load of troubling questions when CMS revealed the number of contracts it had offered for round one late last month.

On March 28, CMS issued a chart showing the number of contracts it had offered in each product category and CBA. It also issued a disclaimer.

“The information in this chart represents the number of contract offers, NOT the actual number of contracts that will be awarded,” CMS said. “In addition, this information does not represent the number of supplier locations for each supplier entity/organization. Some supplier entities have a number of locations throughout a CBA that would be servicing the area if a contract is awarded.”

Providers had until April 3 to accept the contracts; CMS has said the list of those who accepted will be released in May.

While it didn’t say a lot of things, what the chart did reveal was troubling, HME advocates said. Over all product categories in the 10 CBAs, only 1,335 contracts were offered.

“The number of suppliers is probably 700, 800, 900. That’s a significant reduction from the number of current suppliers,” said Walt Gorski, vice president of government relations for the American Association for Homecare.

Such a drastic drop in provider numbers had many questioning whether each MSA would be properly served.

“We have 600 companies there doing oxygen and now we have 44,” said Robert Arado of Caremed Respiratory Services in Tampa, Fla., and administrator of a network that was not offered any contracts for the Miami CBA. “I don’t think we are going to have enough providers to service such a large area.”

John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers, said further problems could come from providers’ bid miscalculations. As a case in point, he referenced the 21 oxygen contracts that CMS offered in Pittsburgh.

“Most companies were looking at this from the standpoint that there were probably going to be five or six providers that were selected in the CBA,” he said, “so companies were doing their pricing based on having 20 percent of the market. But you get 21 companies, and all of a sudden it’s 5 percent of the market … I don’t understand how any of the numbers provided for competitive bidding can be valid.”

In addition to how many, stakeholders also expressed serious concerns about which providers were offered contracts.

Georgie Blackburn, vice president of government relations for Blackburn’s in Tarentum, Pa., whose company bid on all nine product categories for Pittsburgh and was offered five contracts, said most providers know the competition in their area and, therefore, know if the winning providers are local — or even experienced within the product category.

“It’s those outside the bidding area and those who have never done this sector before [that are worrisome],” she said. “How can you bid on an area you don’t know well? That’s troublesome … I take real issue with the fact that we are having players coming into the market without having any track records.”