By: Matt Fischer
With the 2021 competitive bidding round on the horizon for durable medical equipment (DME) providers, both those that are established as well as those fairly new to the industry must take note of the potential pitfalls that may be encountered when competing to become a Medicare contract supplier.
The durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program was first established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Under this program, DMEPOS suppliers submit bids (i.e. applications) and compete to furnish specific items in competitive bidding areas commonly referred to as CBAs. Additionally, suppliers are not just bidding for the rights to a particular CBA but also for a single payment amount that will replace the current Medicare fee schedule payment. The payment will be determined by using the bids submitted. As of December 31, 2018, all contacts have expired. As a result, there is currently a temporary gap period. The upcoming bidding process is loaded with requirements. Therefore, compliance with each requirement is crucial. Here are a few pitfalls to watch out for:
Failure to Obtain a Bid Surety Bond
The Medicare Access and CHIP Reauthorization Act of 2015 requires all bidding suppliers to obtain a bid surety bond in the amount of $50,000. The bond must also be from a surety company approved by the U.S. Department of the Treasury.
Failure to Submit Financial Documents
By the bidding deadline, all required financial documents must be uploaded into Connexion, the agency’s bidding portal. Some of the required documents include tax return extracts, income statements, balance sheets, statement of cash flows, and a business credit report.
Failure to Meet Licensure and Accreditation Requirements for each Location
In past rounds it was permitted for bidders with multiple locations to collectively meet licensure and accreditation requirements for larger product categories with multiple products. However, this round will be different. Each individual supplier location on a bid must meet all accreditation and state licensing requirements.
Bidding registration is planned to begin in June 2019. CMS has announced that it will provide specific dates for registration and bidding along with bidder education programs in May 2019. It’s important to remember that contracts will only be awarded to bidders that meet all requirements. The savviest providers will start preparing now!