Summary of CMS' PAOC Meeting on Competitive Bidding

Dear PMC Members:

The Centers for Medicare and Medicaid Services (CMS) convened the first meeting of the new Program Advisory and Oversight Committee (PAOC) which was appointed earlier this year. At the meeting, CMS released a “tentative” timeline for competitive bidding which indicates that the first round of the program will not be fully implemented until January, 2011, effectively delaying the program an additional thirty months from the aborted first round which was implemented, then delayed by legislation, in July, 2008. CMS hopes to use this additional time to conduct an intensive educational campaign to ensure that providers are aware of the bidding methodology and, hopefully, avoid uninformed or “low ball” bids which could negatively impact single payment amounts and the ability of contracted providers to meet capacity.

To start the meeting, CMS’ Director of Medicare Management and PAOC co-chair Jon Blum stated that the Administration is committed to establishing a fair competitive bidding program for certain Home Medical Equipment (HME), including standard power wheelchairs, purchased by Medicare. He promised that with another shot, CMS will do a better job implementing the program by promoting provider and beneficiary education, increasing transparency and ensuring provider licensing, bonding and accreditation. CMS staff then clarified and detailed several changes to the program. These changes include:

On Line Bidding System

CMS revamped the online bidding registration program that plagued providers in the aborted first round. Under the new program, providers will be required to appoint an authorized user and backup authorized user who will control access to the online bid enrollment process.

CMS also made improvements to the online bidding application form including:

• More “user friendly “ language;
• More data saving points;
• Simplifying status indicators;
• Hard copy data indicators (to help determine whether all necessary financial documentation is submitted);
• Enhanced technical support including:
• comprehensive guides;
• quick reference guides;
• online “help” buttons;
• user friendly error messages; and
• help desk.

Education Activities

CMS intends to conduct an enhanced pre-bidding provider awareness campaign which includes a website, webcasts, teleconferences, listservs, news articles, a zip code lookout tool, live workshops, direct mail and a customer service call center. CMS urges all providers to start the application process early and ensure that your information on your NSC file is up-to-date (including proof of accreditation, licensure, and bonding).

Financial Documentation

The Medicare Improvement for Patient and Provider Act (MIPPA) required CMS to allow providers who have submitted their information in a timely manner an opportunity to provide missing financial documentation to complete their bids. In response, CMS established a covered document and review date (CDRD). Under the CDRD program, bidders who submit their bid applications by a certain date will have their bid packages reviewed, missing financials will be identified and the provider will have a second chance to resubmit the missing requisite financial documentation. In addition, CMS has streamlined the financial documentation needed to be submitted by requiring only the past years data and not financials for the past three years as was required under the initial bidding process.

Licensure, Accreditation and Subcontracting Requirements

CMS urges all providers to, at a minimum, to have an application in to a nationally recognized accreditation body if they are to meet the mandatory accreditation date of September 30, 2009. For those providers who choose not to be accredited at this time, they will need to submit an amended CMS-855S enrollment application which reflects their voluntary termination. This step will protect the provider from being revoked, and subsequently barred, from the Medicare program.

CMS also reminded providers of the new surety bond requirement. As of May 4, 2009 all newly enrolled providers (including those who are undergoing a change of ownership) need to submit a copy of their surety bond to the National Supplier Clearinghouse (NSC). All currently enrolled providers need to demonstrate that they are bonded by October 2, 2009.

A new MIPAA protection requires that any entity subcontracting with a HME provider to supply equipment or service under a competitive bidding contract be appropriately licensed and accredited. MIPAA also requires that contracted providers notify CMS within 10 days of being awarded a contract all subcontracting relationships entered into to fulfill the contract.

New Provider Issues

CMS has established separate thresholds to determine financial status and the ability of a provider to meet capacity. The first threshold was a pass/fail test that examined the provider’s financial data, credit score, etc. to ensure their financial viability. Moreover, a provider who was new to a product category had to be above a certain threshold to count expanded capacity.

In the aborted first round, CMS limited a provider’s capacity to 20% of demand. If a financial score did not support a projected capacity, CMS lowered a provider’s projected capacity to historic capacity. For the first round re-bid, CMS will expand the capacity threshold to provider’s new in a product category to 75%. This should result in slightly more contracts being offered since these new providers will have no historic data to base capacity (so more providers will be necessary to ensure utilization levels are met).

Tentative Competitive Bidding Timeline

• Spring 2009
• Pre-bidding provider awareness campaign begins
• First PAOC meeting
• Summer 2009
• Announcement of bidding schedule/schedule of education events
• Bidder education campaign begins
• Bidder registration period to obtain user IDs and passwords
• Fall 2009
• Bidding begins
• CDRD process begins
• Winter 2009/Spring 2010
• Bid evaluation
• Announcement of single payment amounts
• Contract process begins
• Summer 2010
• Contract providers announced
• Contract provider education campaign begins
• Fall 2010
• Beneficiary, referral agent and general provider education campaign
• January 2011
• Program implementation

Conclusion

The Power Mobility Coalition (PMC) applauds CMS for extending competitive bidding’s implementation timeline, increasing transparency in the program and emphasizing, accreditation, bonding and licensure. The PMC is concerned, however, that issues with capacity have still not been fully resolved and that providers may still have an opportunity to “game” the system by submitting low bids to win a contract with the sole intention of selling their business for a higher price. The PMC pledges to work with CMS and other HME stakeholders to ensure that enough winning providers are contracted to meet capacity and that bidders can’t “low-ball” the process lower single payment amounts and putting beneficiary access at risk.

Attached are the handouts provided at the PAOC meeting. As always, feel free to contact the PMC at esokol@pmcoalition.org if you have questions or need further information.