AMARILLO, TX – As has been widely discussed in the trade press, including recent Medtrade Monday articles, the current Competitive Bidding (“CB”) Round One 2017 and Round Two Recompete will terminate on Dec 31, 2018. The next round of CB will start approximately 18 to 24 months after January 1, 2019. I will refer to this 18 to 24 month period as the “gap period.”
The Proposed Rule that was recently published will not be finalized until shortly after Medtrade 2018 (scheduled for Oct 15-17, 2018, at the Georgia World Congress Center in Atlanta). There is a likelihood that some of the provisions of the Proposed Rule will be modified before the Final Rule is published. Because of this likelihood, some suppliers have raised a concern that the Final Rule will do away with the gap period. This will not happen.
The issue of whether Medicare beneficiaries will be able to obtain DME from “any willing supplier” during the gap period is set in stone. This “any willing supplier” rule is not part of the Proposed Rule. Rather, the “any willing supplier” rule is a result of CMS’s policy decision to wait on starting the process for recompeting CB contracts until after CMS has finalized its changes to the CB rules. The CMS press release/fact sheet pertaining to the Proposed Rule states the following:
CMS has yet to begin the process for recompeting DMEPOS CBP contracts, and the current DMEPOS CBP contract periods of performance will end on December 31, 2018. Beginning on January 1, 2019, beneficiaries may receive DMEPOS items from any willing supplier (until new contracts are awarded under the DMEPOS CBP). CMS will provide additional information about the DMEPOS CBP in the future.
Even though the specific CB program issues addressed in the Proposed Rule may change when the Final Rule is issued, the issue of “any willing supplier” being able to furnish items beginning on January 1, 2019 is not something that needs to be authorized by the Final Rule.
And so DME suppliers need to prepare for the gap period in which CB will not be in operation. Issues that suppliers need to focus on include:
- The Supplier That Has The Legal Relationship With The Patient – Assume that Supplier A is a CB contract supplier. Assume that Supplier B is not a CB contract supplier. Assume that Supplier A and Supplier B currently have a Subcontract Agreement in which Supplier A handles intake and Supplier B delivers products to the patients and handles the education and set-up of the patients. Even though Medicare is paying Supplier A, in reality Supplier B has the relationship with the patients. Assume that Supplier A and Supplier B decide to terminate their Subcontract Agreement effective December 31, 2018. It would be natural for Supplier B to think that it will “take over” the patients effective January 1, 2019. It is not that easy. At the end of the day, the patients are “patients of Supplier A,” which in the eyes of Medicare is the “supplier.”
- Unwinding a Common Ownership Arrangement – In the existing two rounds, a number of CB contract suppliers and non-contract suppliers have entered into “common ownership” arrangements. For example, assume that Supplier A is a CB contract supplier and Supplier B is nota CB contract supplier. Assume that Supplier B purchased a 5% equity interest in Supplier A, thereby resulting in the two suppliers becoming “commonly owned.” As a result of the common ownership, assume that at Supplier A’s request, CMS has added to Supplier B to Supplier A’s CB contract…meaning that Supplier B can serve CB patients and bill Medicare under Supplier A’s CB contract. In this scenario, Supplier B bills Medicare directly; Supplier B does not “bill through” Supplier A. If this common ownership relationship remains in place at the time that the bids for the next round are due, then Supplier A and Supplier B cannot bid for the same product categories in the same CBA. If the two suppliers desire to bid on their own in the next round without having to worry about the other supplier, then the parties may decide to unwind the common ownership arrangement effective December 31, 2018. If they do so, they need to understand that (i) the CB patients that Supplier A has been billing for are Supplier A’s patients and (ii) the CB patients that Supplier B has been billing for are Supplier B’s patients.
- Looking Into The Future – Assume that Supplier B was not a CB supplier for the time period leading up to December 31, 2018. Now assume that Supplier B “jumps back into the fray” beginning January 1, 2019 and starts servicing Medicare patients that, if CB was in effect, would normally fall under CB. Supplier B needs to understand that in order for it to hang on to these patients in the future, Supplier B needs to be successful in securing the next CB contract. As such, Supplier B should start preparing now for the future bid submission. Specifically, Supplier B needs to (i) work to put its financials in good order so that they have a competitive chance of meeting CMS’s financial standards (which, frustratingly, are not made available to the public) and (ii) confirm that it has all of its licensure in place. Lastly, Supplier B should think about whether it wishes to enter into subcontract and/or common ownership arrangements in the event that Supplier B is not awarded the next CB contract.
Jeff Baird and Denise Leard will present the following webinar:
AAHOMECARE’S EDUCATIONAL WEBINAR
Targeted Probe and Education Review: What it Is and How to Respond
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Denise M. Leard, Esq., Brown & Fortunato, P.C.
Tuesday, August 7, 2018
2:30-3:30 p.m. EASTERN TIME
Over the past 10 years, DME suppliers have been subjected to aggressive post-payment audits and prepayment reviews. In responding to a post-payment audit, the supplier is required to justify claims that were submitted years earlier. With a prepayment review, even though the supplier has furnished the equipment to the patient, Medicare will not pay the supplier until the supplier submits documentation that, in the eyes of Medicare, supports the claim. A frustrating byproduct of all of this is the three to four year ALJ backlog. Fortunately, Medicare has taken a step in the right direction by implementing the Targeted Probe and Educate (“TPE”) program. Under the TPE program, the supplier will not be subjected to unlimited requests for documentation…followed by vague denials. Rather, under the program the DME MAC will (i) request a limited number of patient files, (ii) review the files, (iii) explain any denials, and (iv) provide education to the supplier that addresses the denials. This webinar will discuss what the TPE program is and how the DME supplier should respond to a TPE request. Equally as important, this webinar will talk about the steps the supplier should take to ensure that its documentation will pass TPE review.
Register for Targeted Probe and Education Review: What it Is and How to Respond on Tuesday, August 7, 2018, 2:30-3:30 p.m. ET, with Jeffrey S. Baird, Esq. and Denise M. Leard, Esq., of Brown & Fortunato, PC.
FEES: Member: $99.00 Non-Member: $129.00
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or email@example.com.