Editor's Note

Re-bid: Clear as Mud

CMS offers zero transparency for bid data.

• By David Kopf
• Sep 01, 2010

The more I watch the aftermath of the re-bid of Round One the more I’m reminded of baseball Hall of Famer Yogi Berra’s most famous Yogiism, “It’s deja vu all over again.”

First we watched CMS promise a fair bidding process. Then we watched low-ball bidders drive down the funding amount by a jaw-dropping degree. (Honestly, how anyone in CMS seriously accept bids that result in a 32 percent average reduction in funding?) And now we have CMS stonewalling any questions after the bid process.

The one thing different from the first attempt at Round One is that now, instead of an average funding cut of 26 percent, bid “winners” are facing an average cut of 32 percent to their funding. That’s on top of the 9.5 percent the industry agreed to per the Medicare Improvements for Patients and Providers Act, for a grand total of 41.5 percent. So exactly how was the re-bid an improvement over the first attempt at Round One?

Mum’s the Word

It would seem to me that if the bid process and the offering of contracts to bid winners in the Round One re-bid were an improvement over 2008’s attempt, then we would have a less staggering cut. Bidders would have been more reasonable in their bids, and CMS and CBIC would have been more judicious in their review of bids.

I’m not convinced that happened. A review of the “Financial Measures” posted to the CBIC website (www.dmecomeptitivebid.com), which were supposed to be employed during the re-bid, reveals this statement: “The Competitive Bidding law and regulations specify that the Centers for Medicare & Medicaid Services (CMS) may not award a Competitive Bidding Program contract to a supplier unless that supplier meets applicable financial standards. Applying financial standards to suppliers is needed to assess the expected quality of suppliers, estimate the total potential capacity of selected suppliers, and ensure that selected suppliers are able to continue to serve market demand for the duration of their contracts.”

So how in the heck can any provider, large or small, sustain such a massive cut to its funding and still “continue to serve market demand” for a full three-year contract? How can any business in any industry sustain that?

Moreover, the Congressional Budget Office has already re-scored H.R. 3790, the bill introduced by Rep. Kendrick Meek (D.-Fla.) that calls for the repeal of competitive bidding, based on the new bids. The result? Any repeal must account for more than double H.R. 3790’s original pay-for amount (read more in News, Trends & Analysis, starting page 8). They certainly didn’t waste any time …

And that is exactly why the industry is calling on CMS to provide some transparency in the process. An industry push to garner co-signers to a “Dear Colleague” letter from Reps. Jason Altmire (D-Pa.) and Ralph Hall (R-Tex.) calling for re-bid transparency gained 135 signatures. The letter asked CMS to reveal which HME providers were awarded contracts and which ones were offered contracts after the fact, at prices below what they bid.

Likewise, CSI HME has started a survey to collect bid information from providers who submitted bids, as well as suppliers who are located in Round One’s nine CBAs, but who did not submit a bid. (Read more about the survey and the sign-on letter in News, Trends & Analysis.)

Regardless of this push, CMS has so far provided no information. So I guess that means the competitive bidding deja vu continues. On the last attempt, providers almost instantly grew suspicious when they realized numerous bidders had been disqualified from the process for apparently phantom technicalities. That, among other complications helped force Congress’s hand to pass MIPPA.

You’d think CMS would want to be up-front about the process this time around, in order to negate any new attempts at a delay or repeal. CMS’s opaque attitude almost begs the question: “What are you hiding?” The answer might be surprising. Then again, it might be deja vu all over again.

This article originally appeared in the September 2010 issue of HME Business.