CMS Names Round One Bid Winners

BALTIMORE–Earlier this afternoon, the Centers for Medicare and
Medicaid Services released the names of the winning contract
suppliers for round one of competitive bidding, set to take effect
July 1.

In a 2 p.m. press briefing with reporters, acting CMS
Administrator Kerry Weems said 325 medical equipment suppliers have
signed contracts in the 10 competitive bidding areas selected for
rollout of the program.

For a list of the round one winners, click here. Under “Search Tools” select “Find
Suppliers of Medical Equipment in Your Area.”

“Each and every one of these suppliers met quality customer
service and financial standards. In fact, we conducted announced
and unannounced audits and site visits so they could prove that
they met those standards,” Weems said.

Of 1,005 suppliers who submitted 6,200 bids in round one, Weems
said, “We offered contracts to 23 percent of the suppliers that
submitted bids. These were in the winning range and met the quality
and financial standards and discosure requirements.

“Sixty-one percent of the bids submitted were priced higher than
the winnning range, and just over half of these high-priced
submissions were disqualified because they failed to meet other
requirements,” Weems continued, adding that the remaining 16
percent of bids would have been in the winning range had they not
been disqualified.

Weems also said based on the final contracts, about half of the
winning suppliers in each bid area are small suppliers

. “We’re confident that they have enough capacity to meet these
needs, especially when you put the volume of sales and rentals of
competitive bid items into proper perspective,” Weems said.

As an example, Weems said in the Dallas CBA, Medicare pays for
an average 770 walkers each month. That means of 20 suppliers who
won contracts in the CBA, each would be selling about 38 walkers a
month.

“In Pittsburgh, there will be 15 suppliers who will be
furnishing hospital beds,” Weems said. “Medicare currently pays
monthly rentals on about 1,300 beds, which is about 89 beds to be
furnished by each supplier, on average.”

When questioned about companies being awarded contracts without
having provided services in the bidding areas, Weems said: “Look at
the suppliers on the Web site. Suppliers in those areas in many,
many cases have multiple locations in those areas. Ninety percent
of suppliers are in the area in which they bid.”

Weems also announced an extension of the accreditation
application deadline for round two. “This is because a significant
number of suppliers in those communities have not yet applied for
accreditation,” he said.

Under the new deadline, suppliers now must be accredited or have
applied for accredreditation by July 21, 2008, to participate in
the second round bid. The previous deadline was May 14, 2008.

“We also want to let you know today that we’re announcing a new
policy for complex rehab power wheelchairs that will allow us to
pay non-contract suppliers in certain conditions,” Weems said.
“Those circumstances are when a power wheelchair was prescribed by
a physician before the competitive bid began but the delivery of
the item was not made until July 1 or after.”

According to Weems, the agency is now beginning “the steps
necessary to educate and inform beneficiaries and their providers
about their options so they will be able to get the most out of
this new program …

“We have a whole ground game we are going to be rolling out in
the next couple of weeks,” Weems said, in which “every provider,
every prescribing physician and every beneficiary” in the bidding
areas would be contacted about the program.

“We understand that the implementation of this program will be
difficult for some providers because the law requires that there be
both winning and losing bidders,” he said. “While winning suppliers
must accept lower prices, these amounts are based on their bids,
and they have the opportunity to increase the number of
beneficiaries they serve.

“We also know there’s been a frustration because the new system
represents a significant change in how suppliers operate under
Medicare compared to the past. CMS will continue to work closely
with suppliers and make improvements in the program as we move
forward,” Weems continued.

“Keeping this program on track and on time to bring high quality
products to people with Medicare with lower prices is a priority
for CMS,” he concluded.

Indeed, in answer to a question on whether he anticipated any
delays in the program, Weems responded, “No. We’re proceeding.”

However, since a May 6 congressional hearing into the program
that aired a number of problems with the bidding process, the
industry’s efforts to delay round one–and to stop the program
entirely–have picked up steam. And last week, three California
representatives called on Health and Human Services Secretary
Michael Leavitt to conduct a full investigation into questionable
bidding practices in the Riverside CBA.

Immediately following the press conference, the American
Association for Homecare issued a response, noting that “CMS
continued to tout the benefits of the competitive bidding program
although the home care community and Congress have revealed
numerous flaws in the program including threats to services,
quality, and unfair treatment of bidding providers.”

AAHomecare said a Wasington lobbying fly-in scheduled Wednesday
“is an important opportunity to combat competitive bidding at a
critical juncture.” The association said more than 150 home care
providers have registered so far to participate but “there is room
for many more.”

For information on the AAHomecare event, visit www.aahomecare.org. A CMS press release on the
round one winners follows in its entirety.

MEDICARE ANNOUNCES OVER 320 WINNING SUPPLIERS SELECTED
FOR COMPETITIVE BIDDING PROGRAM FOR DURABLE MEDICAL EQUIPMENT,
PROSTHETICS, ORTHOTICS, AND SUPPLIES

The Centers for Medicare & Medicaid Services (CMS) today
released the names of the 325 suppliers that have signed contracts
with Medicare to provide certain medical equipment and supplies to
beneficiaries in 10 communities across the U.S. at significantly
lower prices than they are paying now.

“We are pleased that Medicare beneficiaries living in the 10
first round communities will continue to receive high quality
service and supplies from the suppliers participating in Medicare’s
competitive bidding program,” said CMS Acting Administrator Kerry
Weems. “All of these contract suppliers have met our stringent
standards, so beneficiaries can be assured they receive their
equipment and supplies from legitimate suppliers.”

The new competitive bidding program goes into effect on July 1,
2008, in 10 communities. This program uses the local, competitive
marketplace to lower the costs for certain durable medical
equipment, prosthetics, orthotics and supplies (DMEPOS) for
Medicare beneficiaries who use Medicare-contracted suppliers to
obtain medical items and supplies. Because beneficiaries pay 20
percent coinsurance on the cost of DMEPOS, they will directly
benefit from the savings.

Based on bids submitted by these suppliers, beneficiaries and
Medicare will see prices, on average, 26 percent lower than
Medicare currently pays for the same items. CMS received bids from
1,005 suppliers. There were just under 6,200 bids for one or more
product categories in competitive bidding areas (CBAs) where the
new program is being implemented. CMS offered contracts to 23
percent of suppliers that submitted bids. These suppliers were in
the winning price range and met quality and financial standards and
disclosure requirements. Sixty-one percent of the bids submitted
were priced higher than the winning range, and just over half of
these high-priced submissions were disqualified because they failed
to meet other bid requirements. The remaining 16 percent of bids
would have been in the winning range had they not been
disqualified.

To participate in the competitive bidding program, suppliers are
now required to meet Medicare’s quality and financial standards
that ensure participating suppliers are viable companies able to
meet the needs of Medicare beneficiaries and the terms of their
contracts with Medicare. In addition to those requirements, which
were developed with input from suppliers, a Medicare-contracted
supplier must:

• Be enrolled in and be approved – or accredited – by Medicare
  based on the specific products and services they offer;
• Be financially sound – as demonstrated by common standards in
  use by the financial community;
• Fill orders from their own inventory, or contract with other
  companies that can fill orders for beneficiaries;
• Provide access for beneficiaries to get the items they need;
  and
• Provide high quality customer service by ensuring that delivery
  of products is timely and complaints are resolved quickly and
  appropriately.

“Medicare-contracted suppliers submitted bids affirming they
will ensure that beneficiaries receive necessary equipment and
supplies with a high level of customer service,” said Weems.
“Medicare has the tools to ensure that the suppliers, as well as
companies with which the suppliers subcontract, meet the needs of
beneficiaries to guarantee continued beneficiary access to medical
equipment and supplies. CMS may seek to terminate contracts with
suppliers that don’t meet these requirements.”

As part of the competitive bidding program, suppliers submitted
bids to CMS to supply certain items to beneficiaries that reflect
the prices charged in the marketplace, which are lower than the
prices under the current Medicare fee schedule. Bids were evaluated
to ensure there would be a sufficient number of suppliers,
including small suppliers, to meet the needs of beneficiaries
living in the CBAs. Small suppliers were considered those with
gross revenues of $3.5 million or less and make up approximately 50
percent of the suppliers that accepted contracts in this first
round of the program. Suppliers that are not contract suppliers for
the first round of DMEPOS competitive bidding program may be able
to subcontract with winning bidders for certain items and may bid
in Round two and in future rounds.

To take advantage of the lower prices for the items that were
part of the competitive bidding program, Medicare beneficiaries
living in one of the CBAs who have ongoing need for a DMEPOS
supplier may need to choose a new supplier if their current
supplier is not a contract supplier and they wish to have Medicare
continue to cover their equipment and supplies. A beneficiary may,
in some situations, also be able to continue to receive certain
items from a grandfathered supplier. Grandfathered suppliers are
non-contract suppliers that provide certain rented equipment under
the terms of the program.

Consumers, physicians and other providers can find a list of
Medicare contract suppliers in the 10 initial areas of the program
by visiting www.medicare.gov (under “Search Tools” select
“Find Suppliers of Medical Equipment in Your Area) or by calling
1-800-MEDICARE (TTY users should call 1-877-486-2048). People can
also visit the local offices of the various partner groups, such as
their State Health Insurance and Assistance Program, Area Office on
Aging and a number of community organizations that can provide
information on the program.

CMS today also announced that it is extending the deadline for
suppliers in the 70 second round metropolitan statistical areas
(MSAs) to become accredited. CMS is extending the deadline because
a significant number of suppliers in those communities have not yet
applied for accreditation. Similar to round one requirements,
suppliers will need to be accredited to be awarded a contract.
Suppliers must be accredited or have applied for accreditation by
July 21, 2008, (formerly May 14, 2008), and the final accreditation
deadline for the second round of competitive bidding is now January
14, 2009, a change from the October 31, 2008 deadline.

CMS is urging suppliers in the 70 MSAs to apply for
accreditation immediately because if they do not meet these
accreditation deadlines, they will not be able to compete for
contracts to furnish competitively bid items to Medicare
beneficiaries in these areas.

Additional information on the DMEPOS competitive bidding program
is available at www.cms.hhs.gov/DMEPOSCompetitiveBid..

About this Newsletter

You are subscribed to this newsletter as [email protected]

To unsubscribe from this newsletter go to: Unsubscribe

To subscribe to this newsletter, go to: Subscribe

To visit HomeCare’s Web site click here

For information on advertising in this newsletter, please
contact Kent Peterson, National Sales Manager/Western Region Sales
at [email protected], or John McNamara, Regional
Sales Manager/Eastern Region Sales at [email protected].

To get this newsletter in a different format (Text or HTML), or
to change your e-mail address, please visit your profile page to change your delivery
preferences.

For questions concerning delivery of this newsletter, please
contact our Customer Service Department at:
Customer Service Department
HomeCare Magazine
A Penton Media publication
US Toll Free: 866-505-7173
International: 847-763-9504
Email:[email protected]

Penton Media | 249 W. 17th Street | New York, NY 10011

Copyright 2008, Penton Media. All rights reserved. This article
is protected by United States copyright and other intellectual
property laws and may not be reproduced, rewritten, distributed,
re-disseminated, transmitted, displayed, published or broadcast,
directly or indirectly, in any medium without the prior written
permission of Penton Media.