WASHINGTON--Competitive bidding numbers gleaned from CMS officials at a briefing for House of Representatives staff ricocheted around the country last week, and while much of the data was confusing, one thing was clear: Nearly 63 percent of the bids in round one were disqualified.
Legislative staffers at the House briefing on Tuesday reported CMS revealed that of the 1,005 unique bidders in round one, 630 were disqualified due to insufficient applications.
The news was startling, observers said, particularly because CMS had initially expected more than 28,000 bidders across the 10 product categories and 10 MSAs in round one. As well, the disqualification of so many bidders was inordinately high.
“The fact that CMS disqualified 63 percent of the 1,005 bidders in round one suggests that this whole process got seriously off track somewhere,” said Tyler J. Wilson, president of the American Association for Homecare.
The revelation served as a further indictment of CMS and its execution of the competitive bidding process. The agency has recently come under fire for improperly disqualifying properly submitted bids, giving providers only 10 days to accept or reject a contract offer and failing to notify providers of a deficiency in their bidding documentation.
At the standing-room-only briefing, legislative staffers also elicited the following data from CMS staff, according to AAHomecare:
--The 1,005 unique bidders submitted 6,358 bids for the 10
product categories in the 10 bidding areas;
--1,335 contract offers were ultimately made to either 318, 316 or
206 unique bidders. (Different numbers were given, although
AAHomecare said the variation could reflect networks that
bid);
--1,254 contract offers were accepted (96 percent), which CMS said
would result in DMEPOS savings to Medicare of 26 percent.
In addition, according to Rob Brant, president of the Accredited Medical Equipment Providers of America, a legislative staffer from Texas told AMEPA that of the disqualified bidders, 404 were reported to have bid too high to qualify, and that this was determined after contracts were awarded. The staffer also said 283 were within the range to win but were disqualified.
“These numbers do not add up,” said Brant, whose company, City Medical Services in North Miami Beach, Fla., bid and was disqualified. “One explanation is that a single bidder … could be a network of 20 companies, so the true number of disqualified companies that bid could run [much higher]. That would also affect the number of disqualified individual bidding companies from 630 into the thousands,” Brant speculated.
Michael Reinemer, vice president of communications and policy for AAHomecare, said he was hopeful CMS might clarify the figures in another briefing for Senate staff held on Friday. A wrap-up of what happened there should emerge this week, he said.
Both Reinemer and Brant said House staffers at the Tuesday session questioned CMS officials about a variety of issues, especially why bidders supposedly lacking documentation were never informed.
According to Brant, “When asked repeatedly why they did not inform applicants of the supposed missing documentation, one CMS staffer used the analogy of making an application to college: 'Colleges either accept your application or they reject it, they do not call you to let you know that you didn’t put something in.' They added, 'All of the applicants are big boys and they know they are supposed to meet the requirements.'"
Staffers described CMS officials as “flustered” at the questions; congressional staff were “skeptical” about the CMS presentation and were “generally sympathetic to the concerns raised by disqualified bidders in the first 10 bid areas,” Reinemer said.
“From the feedback we've gotten ... [congressional] staff was very well informed about the issues that emerged in round one and asked very pointed questions, so we hope this translates into even broader [support] for the suspension of round one.”
Recently, the industry got a boost on that front when House Minority Leader Rep. John Boehner, R-Ohio, called on Department of Health and Human Services Secretary Michael Leavitt to delay round one. Boehner, who supports the idea of competitive bidding, asked for an immediate delay “until the mistakes and irregularities can be remedied.”
On Tuesday, AAHomecare sent letters to chairmen of the House Ways and Means Committee, the Ways and Means Health Subcommittee, the House Energy and Commerce Committee, the Energy and Commerce Health Subcommittee and the Senate Finance Committee detailing the problems in round one and reiterating a call for its suspension.
But even as the letters crossed Capitol Hill, CMS continued its implementation of the bidding project--leaving some providers faced with yet another tough decision.
Both Brant and Beth Bowen, executive director of the North Carolina Association of Medical Equipment Services, said providers in the Miami, Orlando and Charlotte CBAs had received contract offers on Monday for product categories they were previously notified they had not won.
“As mentioned in our letter to you dated March 20, 2008, additional contracts would be offered if additional contracts were needed. It has been determined that additional contracts are needed,” read a letter from the CBIC.
The letter then outlined the offer but said documentation had to be postmarked by Friday, April 25. That gave the providers only four days to respond, Brant said.
