Bid Window Opens; Providers Cautioned Not to Rush In

BALTIMORE–Two weeks past its end-of-April target date, CMS
flung open the bid window Tuesday for the first round of national
DMEPOS competitive bidding.

All bids are due by 9 p.m. ET on July 13. The contract period
for mail-order diabetic supplies is April 1, 2008-Dec. 31, 2009.
The contract period for all other product categories is April 1,
2008-March 31, 2011.

Product categories and competitive bidding areas were announced
in early April when CMS released its final rule (see HomeCare Monday Special Alert, April 2).

Charts with key information for suppliers in each of the CBAs
have been posted on the Competitive Bidding Implementation
Contractor Web site (www.dmecompetitivebid.com). CMS said providers
should use the charts in preparing their bids, which will be
submitted through an Internet-based system.

The request for bids did not catch providers unaware, although
it evoked differing responses.

“We’ll be ready shortly [to submit a bid],” said Chris Rice,
director of marketing for Diamond Respiratory Care in Riverside,
Calif., one of the 10 CBAs included in this round. “Starting next
week, we’ll be entering the basic data. I want to make sure I
understand the online interface and have plenty of time to work
through it.”

Rice, who administers an online provider forum (www.competingbid.com), has been preparing for
the CMS project for a year-and-a-half, and his company will bid on
all product categories, he said.

On the other hand, James Bailey, owner of A Medical Equipment in
Plano, Texas, is still on the fence about bidding. He’s kept up
with the massive changes in the HME field, but like most smaller
providers, he’s in a tight spot.

“We are in the process of getting accredited so we can bid but,
honestly, I don’t know [whether to bid],” he said. In order to be
awarded a contract, suppliers must meet quality standards and be
accredited by a CMS-approved accreditor by Aug. 31.

Bailey fully expects to meet that deadline, but he’s still
uncertain what he will do. His small, family-run company has four
national competitors. It generates more than 30 percent of its
revenue from Medicare, but the company doesn’t have the personnel
or the products to cover the entire Dallas-Ft. Worth CBA were it to
win a bid.

“The area that … they are mandating we service is just way
beyond the scope of what I do now,” Bailey said. “We were
considering bidding in a network, but that hasn’t been decided. I’m
still trying to decide whether I want to accept assignment
anymore.”

Bailey said he is looking for a different approach to HME, maybe
in retail or billing everything unassigned. In any case, he said,
the possibility of losing his Medicare business is daunting.

“It’s been the majority of my business since I opened up 10
years ago,” he said. “My whole life is tied up in this business.
Every dime I have or could borrow is tied up here. It’s not
simple.”

If he does bid, it won’t be right away. And that is OK,
stakeholders say.

“It’s not a race. There are no points awarded for being first in
line,” said Rice. “Providers really need to understand that and
take the time to ensure their bid is both competitive and
livable.”

Cara Bachenheimer, vice president, government relations, for
Elyria, Ohio-based Invacare, agreed. “Suppliers should spend the
necessary time and resources to put together the best possible
bid,” she said. “They should not rush to submit it now … There is
no advantage to submitting a bid earlier in the 60-day window.

“I would suggest, however, that suppliers not wait until the
absolute last day–July 13–because there may be significant
volume, which may result in technical issues,” she advised.

Mark Higley, vice president of development for Waterloo,
Iowa-based VGM Group, conducted a seminar on competitive bidding
for the California Association of Medical Product Suppliers the day
after the RFB was issued. “The consensus is early June will likely
be the time the majority will bid,” he said.

Higley, along with Bachenheimer and Walt Gorski, vice president
of government relations for the American Association for Homecare,
strongly urged providers who have not already done so to register
immediately for a user ID and password so they can access the bid
submission system.

“It is my understanding that only between 800 and 900 suppliers
have registered with the CBIC,” Gorski said. “This seems to be
somewhat low, so my advice is to make sure that if you plan on
bidding, you register with the CBIC as soon as possible.”

Higley said only half of the CAMPS seminar attendees who said
they intended to bid had registered for the user ID and password,
and only one had received it.

Bachenheimer added that, because the ID and password are mailed,
the process takes a week or two–a significant amount of time lost
out of the bid window.

While the RFB did not hold any surprises for providers, there
are some questions about the process.

Soon after the final rule was issued, AAHomecare sought
clarification from CMS on a variety of topics but has not received
answers, Gorski said. “However, we have been informed that
questions about competitive bidding and key issues will be posted
on the CBIC Web site in the form of fact sheets and other
educational material.

“Clearly there are some basic issues that we believe CMS must
address in order for suppliers to be able to properly bid,” Gorski
continued. “For example, how will CMS address an issue in a case
where a CBA crosses state lines, and one state levies state sales
tax [on HME] and the other does not?”

That is the case in the Charlotte, N.C., CBA, which reaches into
South Carolina, Gorski said. South Carolina levies a 6 percent
sales tax on HME; North Carolina does not. The situation could
result in some providers in the same CBA having an advantage over
others, he said.

Gorski also noted that CMS has not announced educational efforts
for providers. “We still believe that more time is necessary for
educational opportunities. However,” he said, “we are not extremely
hopeful that a grace period or a delay will be forthcoming.”

Link to the CBIC Web site by clicking here.

For questions, call the CBIC competitive bidding help line at
(877) 577-5331.