BALTIMORE‑CMS has proposed a process to evaluate damage claims from Round One bid winners whose contracts were terminated when Congress delayed the competitive bidding program after a two-week run in July of 2008.
“Any aggrieved supplier that was awarded a contract in 2008 for the Round One DMEPOS competitive bidding program and believes it has suffered damages is eligible to submit a claim,” the agency said.
Included as part of CMS’ 2010 physician fee schedule proposed rule, set to be published in the July 13 Federal Register, a section of the massive 1,128-page document details the claims process, along with the information any bid winners who do file claims will have to submit.
The Medicare Improvements for Patients and Providers Act (MIPPA), passed by Congress on July 15, 2008, ended the first round of bidding after its July 1 implementation following complaints from beneficiaries and an outcry from HME stakeholders. CMS is now gearing up for a Round One rebid in nine of the original 10 competitive bidding areas (minus Puerto Rico), with the bid window to open this fall.
While CMS said it was not suggesting there would not be legitimate claims for damages, the agency included a list of factors to be “considered” by Round One winners before deciding to submit a claim.
Among them, CMS noted that winning a contract “did not
guarantee any amount of business or profits from the bidding
program.” The agency also said the contract stipulated that
CMS would not pay for
any expenses incurred for the work performed under the contract,
and that providers were allowed to keep any new customers they may
have obtained as a result of the bid implementation.
“Based on these reasons and because there have been so few inquiries or responses to the reference in the MIPPA to damages (fewer than seven suppliers),” CMS said, “we believe that as few as 1 percent of the 329 winning suppliers may make a claim for damages. However, as a high estimate, we would estimate that approximately 76 percent of the suppliers (250) may submit a claim.”
Subcontractors are not eligible to submit damage claims.
In determining whether damages are warranted, CMS said it would look at the provider’s estimated and historic capacity and any expansion plans that were submitted as part of the bid, and also would review actions taken to meet the provider’s “responsibility” under contract law to mitigate expenses following a stop-work order.
No damages will be offered for the cost of bid submission.
The fee schedule would take effect Jan.1, 2010, and any claims must be filed within 90 days of that date, CMS said. The claims are to be submitted to CMS' Competitive Bidding Implementation Contractor (Palmetto GBA), which will conduct the first level of review and then make recommendations to CMS.
Also in the new fee schedule rule, CMS proposes revising the
definition of a “grandfathered” item to include all
rented items within a product category. “Thus, if a supplier
chooses to become a grandfathered supplier for any item in a
product category, it must agree to be a grandfathered supplier for
all items it is renting in that product category at the time the
competitive bidding program goes into effect, rather than making
separate grandfathering choices for each individual Health Care
Common Procedure Coding System (HCPCS) code.”
CMS will accept comments on the proposed physician fee schedule
rule until Aug. 31. See the full text of the proposed rule for
instructions on commenting at http://www.federalregister.gov/OFRUpload/OFRData/2009-15835_PI.pdf
See a fact sheet on the proposed claims process at
http://www.dmecompetitivebid.com/palmetto/CBIC.nsf/DocsCat/852573EE00644C00852575E60067B814
See a fact sheet on the proposed grandfathering provisions
at
http://www.dmecompetitivebid.com/palmetto/CBIC.nsf/DocsCat/852573EE00644C00852575E600673BDF