PMC: Summary of CMS' ODF Bidder's Conference
Dear PMC Members:
The Centers for Medicare and Medicaid Services (CMS) held the fourth in a series of competitive bidding "bidder conferences" on Required Financial Documents and Small Provider Considerations. CMS began the session by reminding providers that any licensure issues need to be resolved and updated information reported to the National Provider Clearinghouse. Additionally, all prospective bidders should have registered their authorized operators (AOs) online and have until October 9th to register backup authorized operators (BAOs). Online registration for all users will terminate November 4th at 9pm (EST).
Small Providers
For the purposes of competitive bidding, a small provider generates less than $3.5 million in gross revenues (both Medicare and non-Medicare billings). In selecting winning bidders CMS must ensure that at least 30% are small providers. For example, if there are 20 qualifying providers with bids under the pivotal bid amount, then they multiply 20 by .30 and set the target as 6 small providers. If there aren’t 6 small providers under the pivotal bid, then they will offer contracts to the next small provider that is closest to the pivotal bid amount. Networks are considered as one bidder. If a network with 10 members is the next small provider, then all 10 providers will get a contract. This does not, however, affect the single payment amount which is determined before the small provider target adjustment.
Small Provider Networks
In order to ensure capacity, small providers are allowed to establish networks between 2 and 20 providers, with one primary member designated to submit the bid. The network itself must be able to service the entire Competitive Bidding Area (CBA). The network’s total market share for each product category cannot exceed 20% market share. However, if awarded a contract, the network may later expand. Network members must form a separate legal entity and submit these agreements with the covered documents. Each member must be eligible to bid under the rules (licensed, accredited, bonded, enrolled, etc.), and may only join one network per CBA per product category. The network must jointly submit the members’ financial documents with the bid number on each page. Commonly owned/controlled locations must be included on the bid application. If any documents are missing on any network member, the entire network’s bid is disqualified. Network providers bill Medicare separately and get paid by Medicare directly. If one member loses enrollment, the network is in breach.
xpansion Plans
Form B includes open fields where a provider can describe its expansion plan to address staffing, financing, facilities (square footage), inventory control, distribution methods and subcontractors. Identify the subcontractors, provide a letter of intent and describe their intended function. The subcontractors must be in compliance with provider standards and bidding eligibility requirements. CMS and NSC must have correct and up-to-date subcontractor information on file.
Capacity
CMS encourages providers to use the estimated capacity and bid amount worksheets to supply the number of units by HCPCS to beneficiaries in a calendar year. The worksheets will aid providers in calculating the number of units currently furnished and any additional units after expanding capacity. CMS advised that providers should review the descriptor of the HCPCS to determine the number of items that constitute one unit.
The weight column on the worksheet provides the relative market importance of an item to other items within a product category. Market demand is calculated based on the 2008 statistics of the number of units Medicare paid for in the CBA that year and the number of beneficiaries served. Notes at the top of each chart explain any discrepancies between those numbers.
Providers should submit an amount for all codes in a class. The bid amount is the same for the class or group of items—only one bid amount per class. CMS warned that the order of the HCPCS on the bid worksheets may not match the order of HCPCS on the actual online bid forms.
The worksheet can be downloaded at: http://www.dmecompetitivebid.com
Financial Documents
Providers must submit the financial and covered documents per instructions or their bids will be disqualified. The financial documents must cover one (calendar) year prior to the date submitted, so through year-end 2008. Regardless of the type of business organization, each provider must submit an income statement, balance sheet, statement of cash flow, the revenue and expense forms from the corporate tax return, and a credit report and numerical (or alpha if using Standard & Poors) credit score issued within 90 days of bid submission. New providers (under 1 year) must submit actual and pro forma data to equal one year, but should not combine them. Each statement must be separately prepared for the month in which it applies.
The financial documents must be submitted for each bidding entity in loose page, hard copy, format with the bidder number on each page (provided upon completion of Form A). Only submit required documents. Ensure that the same accounting period is reflected on the financial statements that are used on the tax return. The financial statements must be either accrual or cash basis.
Providers should not use portions of the tax return or forms submitted to federal agencies for other purposes to substitute for the required financial statements. If the tax return indicates other deductions, then supply supporting documentation for those.
Covered Document Review
Under legislation passed last year to delay competitive bidding, Congress also instructed CMS to establish a document review system to help providers identify missing documentation prior to the bid deadline. CMS has targeted November 21st to be the Covered Document Review Date (CDRD). Providers who submit their financial documentation by the CDRD will be notified of any missing documents within 45 days and have an additional 10 business days from the date of notice to resubmit the missing documents. Once the bidding period ends, no changes will be allowed to bid amounts or other changes.
The next CMS bidder’s conference is scheduled for September 29th at 2pm (EST) on the Bid Evaluation Process. Details on how to participate will be sent to PMC members.
