Update: The Latest on the First Round of Competitive Bidding

January 15, 2008

In 2007, providers in the first 10 MSAs came under the gun to prepare bids for the first round of competitive bidding. The final bids were due September 25, 2007. Since that time, information has been scant, though the timeline indicates that CMS plans to announce the bid winners sometime in March.

For those providers wondering if there's been any news on the first round, there has been some news, both from CMS and industry organizations.

• Providers File Second Lawsuit — VGM Group and Last Chance for Patient Choice continued their judicial fight against national competitive bidding by facilitating the filing of a second lawsuit in Ohio. The action, filed in U.S. District Court for the Northern District of Ohio (Cleveland) Eastern Division, alleges violations of the Regulatory Burden Act in conjunction with rule-making implementing the national competitive bidding program. This law requires that federal agencies use the least burdensome method in achieving the intent of Congress when enacting rules related to the law passed. The plaintiff is a small Ohio home medical equipment provider, Premier Medical.
  

• House Small Business Subcommittee Asks Small Business Administration to Intervene in Competitive Bidding Program Implementation — On Dec. 15, the House Small Business Committee, Subcommittee on Investigations and Oversight, sent a letter to the U.S. Small Business Administration (SBA) asking them to intervene and delay the implementation of the DMEPOS competitive bidding program until the SBA's Office of Advocacy "can sufficiently assess the economic impact of the rule on small business." The letter follows the subcommittee's Oct. 31, 2007, hearing on the issue, which examined the ill-effects of the bidding program on small business. During the hearing, the subcommittee heard from industry and other witnesses about how small business will be harmed, and how the Centers for Medicare & Medicaid Services' (CMS) final rule on competitive bidding did not provide for any realistic relief for small business.
  

• Ohio HME Providers Battle Proposed Medicaid Bid Program for DME — Ohio's Medicaid agency scheduled a hearing in Columbus, Ohio, Jan. 9 regarding the proposed rule for DME restrictive contracting. The Ohio Association for Medical Equipment Services (OAMES) reports that the state's Medicaid office, the Ohio Department of Job and Family Services (ODJFS), "filed a new DME rule on Dec. 6 that grants the state of Ohio the authority to award exclusive contracts to ‘one or more providers' for any home medical equipment and supplies." OAMES further reported that while the ODJFS said it would limit the bidding program initially to one product line (such as incontinence supplies), "the rule DOES NOT match this intent, and as drafted, puts ALL home medical equipment and supplies at risk. This is key and means that anything from basic supplies/products to more sophisticated services such as respiratory, infusion and complex rehab could be included in a bidding program and awarded to ‘one or more providers' to serve Ohio's Medicaid beneficiaries." OAMES said there has been a significant outcry by HME providers in the state including more than 400 comments during the public comment period in September.
  

• CBIC Asks Some Providers to Document Certain Bidding Data ASAP — A number of home medical equipment providers who submitted bids during the first round of competitive bidding have received letters from the Competitive Bidding Implementation Contractor or CBIC (Palmetto GBA) requesting documentation to verify that the providers can in fact supply specific items to beneficiaries at the amount they submitted in their bids. VGM reported that some providers may have inadvertently entered monthly rental amounts rather than item purchase amounts in Medicare's electronic bid system. The letters from the CBIC required responses by Jan. 7.