‘Capacity’ Still a Stumper

BALTIMORE — On the last day (Nov. 4) to register officials
for competitive bidding,
questions about estimated capacity dominated discussion at CMS’
eighth and final Open Door teleconference on the Round 1 rebid.

Prior to clarifications on the subject, however, CMS official
Martha Kuespert reminded callers of the upcoming Nov. 21 covered
document review deadline. Unlike last year, providers who turn in
their paperwork prior to that date will get a crucial heads-up from
CMS that could mean the difference between winning a bid or being
disqualified.

CMS will not, however, be checking to see if the documents
turned in are acceptable, accurate or meet applicable requirements.
“Suppliers that submit documents by the covered document review
date will be notified of any missing financial documents within 45
days of the covered document review date,” said Kuespert.
“Suppliers will then be required to submit the missing financial
documents within 10 business days of the notification.”

She pointed listeners to a covered document review date fact sheet on the Competitive Bidding
Implementation Contractor Web site.

Providers were also reminded to submit all required documents in
one package. “You only need to submit one package per bidder,”
reiterated Kuespert. “Be sure that you submit all of the required
documents and only the required documents, because we do not need
documents that are not specified. Please put your bidder number on
every single page of every single document. You get your bidder
number when you complete Form A.”

Along with questions on grandfathering and licensure — you
must have all required state licenses on file with the National
Supplier Clearinghouse before you bid, she said — the CBIC’s
Cindy Dreher, policy and content lead, fielded a number questions
on capacity. The following is an exact transcript of her most
complete answer on the topic:

Question: How should we estimate next year’s capacity
for each item? Should the bid price on each item be for the price
of one item, or for one delivery? Should we be working with
subcontractors to arrive at this capacity?

Dreher: Your capacity is the number of
units that you can furnish, per HCPCS code or payment plan, to a
Medicare beneficiary in a calendar year. So to determine your
capacity for each one of the HCPCS codes, calculate the number of
units that you currently furnish on a yearly basis, and add any
additional units or capacity that you would be capable of providing
annually at the start of a contract period. So for items in the
oxygen product category you’re going to provide, your estimated
capacity for one year is the number of units in the payment class
that you can rent in a year.

Your estimated capacity should be a realistic estimate
— the number of units of an item that you would be capable of
providing for one year, and you will be expected to be able to
sustain this level for the entire contract period. Your estimated
capacity should be based on the units of an item, and your bid
price should be for one unit of an item. And you are going to find
the definition of a unit in DBidS [the online bidding system], and
it is also explained in the bidding information charts on the Web
site.

If you are planning to expand your business under the
competitive bidding program, then you should also complete the
extension plan on Form B and DBidS. If you are planning to use
subcontractors, then you can factor in their expected assistance
when you determine your capacity.

Dreher said when the CBIC evaluates a bidder’s capacity, “we
will look at the expansion plan, as well as hard copy financial
documents to determine if that bidder [will be able to maintain
that capacity]. If your financial health and your expansion plan do
not support your estimated capacity, then we’ll adjust your
estimated capacity to your historical level.”

She added that adjustments to capacity will not affect whether
or not a bidder is awarded a contract.

Dreher gave this response on grandfathering:

Question: How will grandfathered suppliers be made
publicly available to beneficiaries in Medicare Advantage
organizations that have Medicare advantage members?

Dreher: This process only applies to
beneficiaries who are currently renting the item from their
supplier before the start of the program. The supplier has an
option to become a grandfathered supplier, and the beneficiary also
can choose to continue to use the equipment from the current
supplier, which would be referred to as the grandfathered supplier.
Or the beneficiary can choose to switch to a contract supplier.
Grandfathered suppliers are required to notify their Medicare
customers in writing, in advance of the implementation of the
program, as to whether they intend to become grandfathered
suppliers for the item.

On Oct. 30, CMS announced final regulations that specify the
notification requirement.

Check the CBIC Web site for a fact sheet on capacity.

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