Registration Deadline Set Next Week; Bidder Response Unknown

ATLANTA–HME providers in the initial 10 competitive bidding
areas have only a week left to register for their user IDs and
passwords–and the registrations will determine whether CMS gets
the number of bidders it had expected.

Providers who want to participate in the first round of Medicare
bidding must register by Aug. 27 in order to access CMS’
Internet-based bid submission system.

On July 27, the previous bidding deadline, CMS extended its bid
window until Sept. 25. Bidders must be accredited or be in the
process of becoming accredited to submit a bid; first-round bidders
now have until Oct. 31 to become accredited in order to win a
contract.

According to its updated timeline, CMS will conclude bid
evaluation and begin its contracting process in January 2008, with
winning suppliers to be announced in February. The agency will
conduct an education campaign for beneficiary and referral agents
from April 1 to July 1, when the competitive bidding rates are
scheduled to go into effect.

Thus far, CMS has been mum about the numbers of registrants or
bids it has received.

“[The American Association for Homecare] has asked for that
information but has been told it would not be released,” said Walt
Gorski, AAHomecare vice president of government affairs, adding
that there is a need for much more transparency in the competitive
bidding system.

“Not only should the government tell us how many people are
bidding, but the industry should know the criteria that CMS will
use to evaluate bids before the evaluation takes place,” Gorski
continued. “And it should know the financial measures it is being
judged by … Not knowing these measures is like playing a football
game where you don’t know where the end zone is.”

Already, industry sources are questioning CMS’ estimates related
to the bidding program. In its final rule, published in the April
10 Federal Register, the agency estimated that:

–Of the approximate 28,960 suppliers providing DMEPOS items in
the initial CBAs, 15,973 will place bids;
–It will cost a supplier an average of $2,303.16 to prepare a
bid;
–9,584 suppliers are expected to win contracts;
–68 percent of suppliers will furnish products subject to
competitive bidding and will be affected by competitive bidding
during the initial round;
–The average dollar loss in Medicare allowed charges per losing
supplier in each CBA will be between $35,000 and $40,000;
–Suppliers in the CBAs who do not win contracts in the initial
round of competitive bidding will lose a total of $275 million in
2008 and almost $2 billion in 2011.

Most stakeholders believe that the number of bidders is far
fewer than CMS had anticipated. In recent weeks, accrediting
organizations have said the number of applications they have
received thus far is much lower than expected. (See HomeCare Monday, Aug. 13.)

Gorski said he thinks CMS was forced to extend the bidding
process in order to correct problems with its online bidding
system. But he said he does not believe that extending the bid
deadline to Oct. 31 will result in a rash of new bidders.

“I don’t think extending the time period [will make] a
significant difference in the number of folks who plan on
participating,” he said.

For information on bid registration and deadlines, visit the
Competitive Bidding Implementation Contractor Web site at www.dmecompetitivebid.com.