Medicare Compliance & Reimbursement

Clues in proposed bidding rule can help you prepare.

The feds continue to wrestle with the "what" and "where" of competitive bidding for durable medical equipment, but don't let that keep you from proceeding directly to "Go," experts say.

The companies that survive under bidding will revamp their strategic plans in advance to accommodate the new realities under Medicare, coaches Wallace Weeks of the Weeks Group Inc. in Melbourne, FL.

Smart idea: Plan as if your products and region will be included in phase one of competitive bidding. By doing so, you'll be in the game from the start or at an advantage moving forward.

The proposed rule released April 24 and published in the Federal Register May 1 gives suppliers valuable insights into how to gear up, agrees Alison Cherney of Cherney & Associates in Brentwood, TN. In assessing your competitive-bidding readiness, consider these proposed rule provisions:

• Your company will have to be accredited. Accreditation is a given; the question remaining is just a matter of hearing the details about who you'll be expected to turn to for your quality stamp of approval. If you haven't contacted accrediting organizations for details of their existing programs, do so now, advises Cherney. Taking action now will help you exercise your quality-control muscle--or even win accreditation in advance.

Look for a final rule outlining quality standards by the end of the year, say Centers for Medicare & Medicaid Services officials.

Watch out for time bombs: CMS will grant a grace period for suppliers who aren't accredited come bidding time but don't expect a big cushion. And if you're not accredited by the end of the grace period, you'll lose even if you have the winning bid: CMS will be able to terminate your contact, according to the proposed rule.

• Small players can band--and bid--together. Though the final rule will tell the whole story, CMS' inclination to allow such networking is good news in an industry comprised mostly of small businesses, notes Weeks.

Hidden benefit: Affiliating with well-matched partners will also help small suppliers spread risk.

• Mail order business will color competition. CMS plans to establish a nationwide or regional competitive bidding program after 2010 for items that are furnished by mail order, such as diabetic testing supplies, notes the American Association for Homecare. Prior to that time, mail order suppliers would be eligible to submit bids in the competitive bidding areas identified in 2007 and 2009.

• Cost-efficiencies may help you win market share. A winning bidder whose bid is below the single payment amount set by CMS will be permitted to offer beneficiaries rebates, according to the proposed rule. The rebates may represent the difference between the company's bid amount and the Medicare single payment amount set through the competitive bidding process.

Note: The proposed rule is at www.access.gpo.gov/su_docs/fedreg/a060501c.html. CMS will accept comments on the rule through June 30.