ATLANTA--An unknown number of home medical equipment providers got an unwelcome New Year surprise: letters from Competitive Bidding Implementation Contractor Palmetto GBA questioning their bids and seeking further documentation.
Providers were given until today to respond to the inquiries or face disqualification of their bids.
"We got a registered letter [on Dec. 28], and basically it says that they are contacting us about an urgent bid evaluation that could affect our bid and requires an immediate response," said Jerry Jeanes of Choice Medical in Denton, Texas. "The letter I have has five HCPCS codes on it and says that they want a dealer price list and invoice or something that details the actual cost for these five items."
Jeanes was one of at least 15 providers who reported receiving the letters to Waterloo, Iowa-based buying group VGM last week, according to Mark Higley, vice president-development. While it is unclear how many providers received such letters or whether CMS was sampling the bids or evaluating every single bid, the issue noted in each of the letters VGM heard about was the same: the bids themselves, Higley said.
"It is obvious that these letters are for bids approximately one-tenth of the purchase price," he said. "I don't think these were low-ball bids; the providers intended to submit an appropriate bid, but now they could be disqualified."
Higley said he believes some providers became confused by the bid form, which called for them to calculate their capacity in months but to enter the actual bid amount as a single purchase price.
"My concern is that some providers bid a monthly rental amount rather than the purchase price," he said.
Jeanes is sure he did just that. "What I think happened in my case is that when I looked at the instruction sheet I got from CBIC, when you get to some of these HCPCS codes, [it] says that one unit equals one monthly rental. So when I calculated my bid, I deducted whatever the [discount] was I was going to reduce my amount by and I divided the base by 10, and that was the amount I provided."
For example, he said, the allowable was $210.70 for a pair of elevating leg rests. "I took my discount off of that, and divided the balance by 10, and that's what I submitted to them.
"This is my fault, obviously, based on what I interpret now to be confusing instructions," Jeanes said sadly. "We jumped through all these hoops and spent all this money, and to be disqualified because of this just makes me sick."
The threat of disqualification is very real for Jeanes and the other providers who received such letters, Higley said, because their bids cannot be changed. The letters themselves reiterate that: "It is important to note that bid amounts may not now be revised. As stated in the [Request for Bids], once the bidding window closes, all bids are considered final and no further amendments to the bids are permitted."
So what hope do recipients of the letters have?
"While the CBIC will not automatically accept bids approximating one-tenth (the monthly rental amount) in a purchased item category, there may exist a chance of bid acceptance if the provider documents the acquisition cost and includes an explanatory letter with the submission," Higley said.
Government officials would not say exactly how many letters went out, according to Walt Gorski, vice president of government relations for the American Association for Homecare, who was enlisted by Higley to pursue the matter with CMS.
As of Friday, Gorski said, CMS had not made a determination as to what it will do. But providers who respond to the letters with strong documentation could help their own cases.
"They want to see what we are telling them. A supplier has to be very up front and say, 'A mistake was made; I bid one-tenth of what I wanted to bid,'" Gorski said.
"From AAHomecare's perspective, in those cases when a supplier bid one-tenth of what they wanted to bid, it would seem there would be an easy patch," he added. "Whether CMS will do that I guess depends on how much it affects capacity. We are very concerned that small suppliers who found this system very confusing to begin with will be left out of the program because of a simple error. Even the IRS lets you correct mistakes."
For his part, Jeanes is hopeful that CMS will allow a fix to an honest mistake. He was faxing all the requested documentation on Thursday.
"I am going to send several pages from the instruction sheet and
show them I didn't make this up and that there was a reason for
what I did and hope they will be forgiving and understanding," he
said. "All I can do at this time is keep my fingers
crossed."
