Competitive Bidding: Bid Limits and Weights Are Posted for Product Codes
Last week the Competitive Bidding Implementation Contractor (CBIC) posted the bid limits and weights for all of the HCPCS Codes in the product categories that will be subject to competitive bidding. See the chart at www.dmecompetitivebid.com. Under the "Suppliers" section, go to Bid Evaluation Process and then click on "Item Weights and Bid Limits." According to last week's CMS open door forum for the home medical community, competitive bidding should officially start any day now in the 10 MSAs selected for the first round.
The final rule establishes a methodology for selecting contract suppliers (home care providers) that requires the selection of a sufficient number of to meet the expected demand for competitively bid items within a competitive bidding area (CBA). Based on bids received, CMS will establish a composite bid for each provider by product category (a composite bid is the sum of a provider's weighted bids for all items within a product category) and rank composite bids from the highest to the lowest in price. The lowest-ranked composite bid that includes a sufficient number of qualified providers to meet beneficiary demand for the items in a product category will become the "pivotal bid." Qualified providers that meet all requirements and whose composite bids are less than or equal to the pivotal bid will be selected as contract suppliers.
To establish a composite bid for a provider, CMS will use an item weight, which is a number assigned to an item based on its beneficiary utilization rate when compared to other items in the same product category. The item weight is multiplied by the bid price that the supplier submits for that item. This becomes your weighted bid for that item. A composite bid is the sum of a provider's weighted bids for all items within a product category. The composite bid is used to compare bid prices that providers have submitted for the items within a particular product category.
This article originally appeared in the May 2007 issue of HME Business.