Competitive Bidding First Steps
By Kathy Dodson, AOPA Government Affairs Department

In order to participate in the upcoming competitive bidding process under Medicare, you will have to both apply for and submit your bid to Palmetto GBA, the Competitive Bidding Implementation Contractor (CBIC). 

As of this writing, the final regulations on how this will work have not been released. But the Centers for Medicare and Medicaid Services (CMS) recently published drafts of the forms necessary to apply for participation in competitive bidding. 

While there is no guarantee these forms won’t change, they do give a good idea of how CMS plans to implement the program. 

Qualifying for competitive bidding
To be eligible for competitive bidding, your company will need to:

The American Board for Certification in Orthotics and Prosthetics (ABC) and the Board for Orthotist/Prosthetist Certification (BOC) are two of the organizations approved by CMS to accredit O&P facilities. 

The basics
Your facility will have to complete at least two forms to apply for approval to participate in competitive bidding: the application (Form A) and the bidding sheet (Form B). This set of two forms will be required for each Competitive Bidding Area (CBA) in which you wish to bid. (If you would like to see the drafts of these forms, go to http://snipurl.com/18osj.) 

The July 2006 O&P Almanac “From the Hill” column, “A Closer Look at Competitive Bidding,” explained that this year CMS is selecting 10 specific geographic areas, called Metropolitan Statistical Areas (MSAs), to start implementing competitive bidding. An additional 80 MSAs will be added in 2009, with further expansion coming in subsequent years. At press time, CMS has not announced these first 10 areas. 

However, after it determines these 10 MSAs, CMS will assign one CBA to each. While most companies will probably only wish to operate in one CBA, it is possible that some companies may serve patients in more than one CBA. 

How to apply
On the application, indicate whether your company is an individual supplier with a single location, a supplier with common ownership in multiple locations, or a primary network supplier. If your company has multiple locations, you only need to complete one application, but on it you have to list each of your physical locations, including each Medicare supplier number and National Provider Identification Number (NPI). 

You also have to select the product categories on which you wish to bid. As of press time, CMS has not announced the specific product categories or codes included in competitive bidding. It’s likely, however, that at least some of the MSAs will put some off-the-shelf (OTS) orthotics up for bid. 

While the application form requires you to indicate your service type, the choices offered on the form (retail location, mail order or home delivery) don’t accurately describe O&P. While we do not consider O&P patient care facilities “retail” locations, this may be the most appropriate designation, given the choices. AOPA is working to have CMS clarify this item further. 

The form requires you to list accreditation information for each location serving the competitive bidding area. So if you have several offices within a CBA, all of them must be accredited to allow you to participate in the program. You will be able to meet the accreditation requirement if your facility has applied for, but has not yet been awarded, accreditation. 

(Even if you are not interested in participating in competitive bidding, eventually all facilities will need to be accredited in order to bill Medicare.) 

The application also requires you to disclose any current or past sanctions or debarments, including actions taken against any member of your board of directors, chief corporate officers, high-level employees, affiliated companies or subcontractors. 

The bidding process
The bidding sheet, Form B, allows you to actually submit the dollar amount of your bid. Only one bid will be allowed for each item. Companies with more than one facility cannot submit multiple bids at different amounts for the same item. Bid amounts must include the cost of furnishing the item, as well as any required service directly related to it, throughout the geographic area of the CBA. 

For example, your bid must include any charges for patient/caregiver training, follow-up and shipping charges. You will also be required to indicate on the bid form the specific manufacturer, model name and number of the device you provide for that bid amount. CMS is aware that your choice of device may change over time. 

The form asks for two different types of figures:

Companies with multiple locations should combine all information for the product category. Estimates will be acceptable. 

You will also be asked to indicate which counties in the CBA you are currently servicing for the product category. If you do not cover an entire county, list the ZIP codes you cover. 

Once bidding opens, you have 60 days in which to submit your bid. During this period, you may amend your bid as often as you wish. However, once the 60-day period ends, no more changes will be allowed. It is possible that the CBIC may ask for additional information after this bidding window closes, but if it does not, you cannot initiate any changes or provide any additional information. 

Form B will supply the HCPCS codes that are available for bid, but you will be required to indicate for each:

This last figure will either be the same or close to the number of these items you provided in the past or, if you are expecting to increase capacity, your estimate of the increased capacity. 

Additional requirements
In addition to providing this information on each item, you have to supply the following in hard copy to the CBIC: 

Certification statement signed by an authorized individual. This is a statement supplied by the CBIC that must be signed to certify, among other things, that you are providing accurate information, that your signature binds the organization, that you will provide any changes in the information to the CBIC within 30 days of the change and that you meet all of the supplier standards. 

Financial statement. If you submit corporate tax returns, you are required to submit the Schedule L (balance sheet) from your tax returns for the last three years. In addition, you are also required to provide a statement of cash flow (Statement of Changes in Financial Position) and a statement of operations (Income Statement) for the past three years. 

All documents that are not prepared as part of a tax return must be certified as accurate by the supplier and be prepared on an accrual or cash basis of accounting. If you are a new supplier and do not have three years of data, you should provide projected financial statements. 

Supplier credit report and score. This credit report and score must not be older than 90 days from the date on which the bid is submitted and must be prepared by Experian, Equifax or TransUnion. 

Signed letter of intent to enter into an agreement. If you plan to expand your capacity to provide care by using a subcontractor, you must submit a letter of intent to enter into an agreement with that subcontractor. The letter of intent must include:

Settlement agreement and corporate integrity agreement, if applicable. Unless you have been involved with CMS in a fraud and abuse issue, it is very unlikely that you will need either of these documents. 

Copy of your accreditation organization’s certificate of accreditation. 

Start preparing now
As of press time, the due date for competitive bidding has not been announced. However, by law, it must be implemented by the end of this year and may be much sooner. So if you think you will be interested in participating, start gathering the necessary documentation and have your facility accredited to be in good shape to apply as soon as you are permitted. 

AOPA will provide you with more information on competitive bidding as soon as it is released by CMS.

Kathy Dodson is the senior director of government affairs for AOPA. Questions? Call (571) 431-0810 or visit www.AOPAnet.org