WASHINGTON, DC – Are you intending to submit a bid for Round 2021 of the Medicare Competitive Bidding Acquisition Program? If so, there are a number of things that are very important for you to know before doing so. First, education is key. A lot has changed that could impact the manner in which you bid. If you have not participated in any training made available through the CBIC, VGM, AAHomecare, or other key stakeholders, I highly encourage you to do so.
First, read all the information available on the Competitive Bid Implementation Contractor (CBIC) website for Round 2021. There is a lot information regarding timelines and required documents, but more important, is familiarizing yourself with what is different about the current program. Also, visit the website that is a collaborative effort of industry stakeholders AAHomecare, Council for Quality Respiratory Care, VGM, and the Healthcare Nutrition Council. This site also houses a downloadable bid calculator that can help you determine the most appropriate bid rate for your business. Be sure to sign up on both sites for e-mail alerts and familiarize yourself with the content. Some key things to note:
1. The “bid ceiling” is the limit against which bidders can submit bids for the lead item in each product category in each CBA. For Round 2021 the bid ceiling is the 2015 Medicare fee schedule, plus applicable CPI updates (inflation). This means that bidders can bid for the lead item in a product category up to the level of the 2015 Medicare fee schedule for the item. Originally in the 2014 regulation CMS set the bid limit to the adjusted fee schedule (derived from the bid program “single payment amounts” or SPAs); however, CMS raised the ceiling recognizing that the bid program would not be sustainable if the bid ceiling was lowered each round.
2. CMS is changing the methodology to determine the SPA. It has been raised to be the “maximum winning bid” versus the “median bid” from previous rounds. Under this reformed/revised system, CMS will establish the SPA based upon the maximum (highest) bid amount by suppliers in the winning range. That is, once the group of initial contractors are identified, the SPA will be set at the highest bid price of those contractors. Effectively, with the exception of the highest bidding supplier, all contract suppliers will be reimbursed at an amount higher than they bid.
3. CMS requires that all bidders in Round 2021 obtain a bid surety bond in the amount of $50,000 for each CBA in which they submit a bid. DMEPOS suppliers should begin their preparations now and secure their bond if they intend to place a bid in one or more of the 130 competitive bid areas (CBAs). It is important to note that the bid surety bonds required for the DMEPOS Competitive Bidding Program are NOT the same as the surety bonds required for DMEPOS supplier enrollment purposes. Familiarize yourself with the requirements of the bond and be aware of the regulations relative to accepting contract offers
4. CMS has broken the product categories down further into 16 unique categories, including two new categories for off-the-shelf back and knee braces as well as non-invasive ventilators. They also have removed the national mail order diabetic supplies from Round 2021.
5. In previous rounds, you were required to submit a bid for every item in a product category. This round, you are only submitting bid for the “lead item” and CMS automatically calculates the bid amount for all the other items based upon relative price ratios from the 2015 unadjusted fee schedule. Be sure to check out the calculator on the stakeholder web-site to assist in determining your bid amounts. This is integral because you have to make sure you bid amount is sustainable for all of the non-lead items as well.
6. CMs will be conducting a “bona fide bid” process. All bids are screened and evaluated by the Competitive Bidding Implementation Contractor (CBIC) to ensure they are bona fide (i.e., the bid amount for a particular lead item passes scrutiny as a rational and feasible bid for furnishing the lead item and all non-lead items in the product category). If your bid falls in the lower end of the bid amounts, you may be asked to provide information showing that you can provide the equipment at the rate you bid. Things you should consider if the amount you pay for the equipment, overhead costs, delivery costs, and profit. If CMS determines your bid was too low, it may be disqualified.
If you plan on participating in Round 2021, educate yourself and bid smart! As an industry, if we don’t utilize the tools and materials made available to us and bid accordingly, it could have a long-lasting and devastating impact on the future of our industry. If you need one-on-one assistance in navigating through the competitive bid process, The van Halem Group is available to assist.
Wayne H. van Halem, CFE, AHFI, is president of The van Halem Group – A Division of VGM Group Inc. Mark J. Higley is vice president – Regulatory Affairs, VGM Group, Inc.