Open Door Forum Triggers Catalog of Questions on Final Rule

BALTIMORE–In hopes of getting answers to questions swirling
around competitive bidding, more than 1,100 HME stakeholders dialed
in to a special CMS Open Door Forum last week for a discussion of
the final rule.

But agency officials appeared to be stumped on some issues or
referred listeners to information that would, they said, appear
later on the Competitive Bidding Implementation Contractor Web site
(www.dmecompetitivebid.com).

“I think the Open Door raised more questions than it answered,”
said Walt Gorski, vice president of government affairs for the
American Association for Homecare. Gorski said AAHomecare had
already submitted a list of questions about the final rule to CMS
and would be sending more.

CMS issued the final rule on April 2, and opened official
registration for bidding on April 9. (For details, see HomeCare
Monday’s Special Alerts on April 2 and April 9.)

During the conference call, CMS officials said technical
difficulties with the new online registration system have been
resolved and encouraged providers to try again if their
registration attempts had failed. They also noted that a toll-free
help line for the CBIC has been set up at (877) 577-5331.

Joel Kaiser, deputy director of the division of DMEPOS policy
for CMS, provided an overview of the final rule and reiterated the
need for home medical equipment providers to become accredited by
one of the approved accreditation organizations. “Our expectation
is that all providers in the 10 MSAs will be accredited before we
enter into a contract for winning bids,” he said.

He also noted that suppliers placing bids must submit “what
their capacity is for serving that [MSA].” When one caller
questioned how that could be ascertained, she was told information
on that issue would be available soon on the Web site.

But when the agency opened up the call to audience
questions–which came on everything from rental payments to bid
winners–some were answered, some weren’t and some seemed to leave
callers confused.

Don Clayback, senior vice president of networks for The MED
Group in Lubbock, Texas, led off an exchange with Martha Kuespert,
director of the CMS division of DMEPOS policy, when he expressed
concern about the agency’s plan to open bidding later this month.
“What are the opportunities to modify the timeline that we’re
working under?” he questioned, noting that the rule would affect
more than 3 million beneficiaries and thousands of providers, yet
“there basically is going to be less than a 21-day education period
to get everybody up to speed prior to starting the bid.”

CMS will hold to the deadline, Kuespert responded, because “we
do need to implement the prices on April 1, 2008 … There is a
60-day bid window, and we believe that should provide opportunity
for suppliers to submit their bid.”

Clayback then noted that “given that this has been going on for
more than three years and the final rule took more than a year to
be finalized, it seems like [you’re] really setting the collective
group of us up for failure in not giving enough time for people to
actually prepare and submit an educated bid.”

“I’m glad you noted that this has been a work in progress,”
Kuespert answered. “There has been information about what our
thoughts were concerning the program through a variety of sources.
We’ve had open public meetings with our Program Advisory and
Oversight Committee. We had the proposed rule that everyone had a
chance to look at, and we wanted to do a thorough job addressing
all of the stakeholders’ and commenters’ concerns in our final
rule. As far as educational materials, we are planning a Web cast
to allow suppliers to learn all they need to do to submit a bid.
There will be a tool kit to assist suppliers through the bid
application process. And again … suppliers will have the entire
60-day period, plus this pre-bidding educational period, to
determine their bids and make a submission.”

Days after the forum, however, Clayback was still shaking his
head over the timeline. “This is a program that has been in the
works for three years, and even today we still don’t have all the
information we need yet they are still moving forward. I think it’s
incredible,” he said. Clayback added that it is shortchanging
providers to expect them to digest the contents of the 400-page
rule, get all their questions answered and come up with intelligent
bids in such a short period of time.

“We’re at the starting line and we have one foot on the banana
peel,” he said.

Gorski said AAHomecare is seeking clarification of the timeline
from CMS. “This is an extremely complex rule that will
fundamentally impact the HME community and the individuals we
serve,” he said. “Clearly, we need time to digest the rule and
analyze its implications so that home care providers can respond
appropriately and meet the conditions laid out by CMS.”

The issue of complex rehab’s inclusion in the bid categories was
also raised during the forum. Georgie Blackburn, director of
compliance for Blackburn’s Physicians Pharmacy in Tarentum, Pa.,
and president of the Pennsylvania Association of Medical Suppliers,
wondered how providers were to bid for rehab accessories and what
accessories would be included.

Officials referred her to the HCPCS codes listed on the CBIC Web
site. Blackburn said later that after seeing the codes, she was
even more concerned because many of the accessories are for
repairs, as opposed to accessories provided with a complex rehab
product. “[You] are precluded from billing for some of those codes
when you provide complex rehab,” she said. “It might have been an
oversight; someone needs to revisit that.”

Staff members fielded several questions on whether information
needed to develop bids–such as current fee schedules and the
weight of items in each product category–would be available before
bidding begins. That information will be posted on the CBIC site
“over the next few weeks,” according to CMS staff.

Providers also had concerns about how bid winners will be
picked. “When you determine the number of small suppliers, will
they be chosen first?” one caller asked.

Kuespert gave the following explanation for calculating the
small supplier target, set at 30 percent of contract winners under
the final rule:

“Our process calls to array the bids, and then we set the
‘pivotal bid,’ [the point at which] we have enough suppliers to
meet the beneficiary demand. The suppliers below that pivotal bid
are the winning suppliers … If we have enough small suppliers in
the winning range to meet the small supplier target, we are
done.

“If we do not have enough small suppliers to meet that target
number, we will then go above the pivotal bid, starting with the
small supplier closest to the pivotal bid, and offer that small
supplier the opportunity to have a contract with us at the
single-payment amount.”

And who exactly will choose the winners, another caller wanted
to know?

The CBIC (Palmetto GBA) “will be handling the bid evaluation
process for us,” Kuespert said. While suppliers will submit bids
through an online system, “there will be some financial information
that will need to be submitted hard-copy.

“The CBIC will be using a computer program to array the bids,
and then we have experts on staff there who will be evaluating the
financial criteria,” she continued, noting that CMS gets weekly
reports from accreditation organizations on suppliers’
accreditation status.

Some additional questions received simple answers:

–Do suppliers have to bid on every product within a product
category?
Yes.

–Can a network of suppliers with a total of less than $3.5
million in annual revenues qualify as a small supplier?
Yes.

–Do providers have to have a physical location in a CBA to
submit a bid?
No.

But other responses were more complex:

–Will reimbursements stay at the set price for the length of
the contract (three years)?
“The competitive bidding program … is separate from the standard
payment rules, so the contract price is the price that would be
paid for the entire contract period,” Kaiser said. But he added
that on rental items, “that doesn’t mean it continues as long as
the rental period continues.” For instance, because competitive
bidding contracts run for three years and then will be recompeted,
the final rule’s grandfathering provisions would apply for “anyone
who’s in the middle of a rental period when switching from one
competitive bidding contract to the next. If you’re a contract
supplier for one round and then you lose that contract in the next
round of bidding, you can choose to be a grandfathered supplier for
that item.”

–For rental items, will payments be made in one sum or broken
out into monthly payments?
“Under competitive bidding, a supplier’s ‘purchase’ bid will be
used to calculate the rental payments for the 13 months,” Kaiser
said, “the same way they are today under the fee schedule world.”
That is, he explained, “we take historic purchase payments under
Medicare. Ten percent of that historic purchase payment is the
rental payment for the first three months, and 7.5 percent of that
purchase payment is the rental amount for months four through
13.”

For a replay of the April 11 Open Door session, call (800)
642-1687 and use conference ID 2739332. The recording will expire
on Friday, April 20.