ATLANTA--In questions raised during a recent CMS competitive bidding teleconference, a persistent issue popped up again: the agency's lack of transparency in how it is implementing the program.

During the June 21 open call, The Med Group's Don Clayback, senior vice president of networks, asked whether estimated capacities for each provider would be totaled for comparison with others. Officials with Palmetto GBA, CMS' Competitive Bidding Implementation Contractor, told him they couldn't "go into specifics as far as our internal processes."

Later, they told another caller who voiced similar concerns that they weren't "trying to be coy," but that bid evaluation was "an internal process" and further information could not be given.

"So it's not a transparent process," the caller responded.

No, industry experts note, it's not. And there's nothing to force CMS to make it that way, either.

"The rule is written in a way that allows a lot of discretion in how [CMS] implements competitive bidding," said Washington attorney Asela Cuervo, Law Offices of Asela Cuervo. "There's a lot of administrative process that just is not defined under the rule."

That makes the process of bid evaluation very subjective, according to Cuervo.

"It's a black hole," added Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare Corp. "You put together a bid, based on hopefully fairly informed, educated analysis of your operation, but how is CMS going to look at that data? We have no idea."

For example, Bachenheimer said, CMS has said that it would throw out unreasonably low bids. But exactly how "unreasonable" would be defined, CMS has not said.

"[CMS] released the financial ratios several weeks ago, but do they have pass-fail measures?" Bachenheimer questioned. "Who knows? If you submit a bid, you can figure out what your numbers are, but presumably they're making some analysis of those numbers to determine whether you're financially viable. What in their view is financially viable--and what's not?"

The fact that CMS was provided such huge discretion in the competitive bidding statute means the industry does not have much leverage, she pointed out, noting there's nothing to compel the CBIC to reveal its bid evaluation criteria.

What's more, providers can't appeal the bid decisions, so they have no way of knowing what happened at any stage of the evaluation process if, for example, they lose a bid.

"It could be a simple mathematical or clerical error," Bachenheimer said, but the bidder may never know.

Bachenheimer stressed the importance of getting the industry-backed Tanner-Hobson bill, H.R. 1845, passed. In addition to its "any willing provider" provision--which would allow qualified providers who had submitted a bid to continue doing Medicare business--the bill would require due process protections and bring congressional oversight into the program. (See HomeCare Monday, April 2.)

According to Bachenheimer, H.R. 1845 and its Senate companion S. 1428 would "make a dramatic difference in how CMS carries out this program and their accountability in the process.

"Legislative relief is our only opportunity," she said.

Clayback added that it would help providers put together bid information if they only had more detail about how the bids would be judged.

"When everything is being done behind closed doors, people are concerned [about] mistakes or misinterpretations that might occur, and how do you become aware of those?" he asked. "That's really what the issue is. Fine, they don't want to tell us, but [although] it isn't specifically required, it may help facilitate the process."

For a transcript of the June 21 teleconference, click here.

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