CMS Refuses Round Two Administrative Delay Request

Tavenner says CMS will void contracts of unlicensed Tenn. bid winners.

• By David Kopf
• Jun 20, 2013

After receiving a letter from 227 lawmakers calling for CMS Administrator Marilyn Tavenner to delay implementation of Round Two of competitive bidding due to various problems found with winning bidders, CMS will not implement an administrative delay of Round Two of competitive bidding.

That said, Tavenner said in a response to a similar letter from the Tennessee delegation that CMS would void the contracts for bid winners in Tennessee that did not have the necessary state licenses. This would amount to roughly 30 of the 98 suppliers contracted via Round Two.

The Administrator said that CMS contracts with “carefully screened” suppliers that are accredited, financially sound and meet “state licensing standards,” and implied that the suppliers that were not licensed had failed to meet that requirement because certain “states change their licensing requirements or reinterpret existing ones during the supplier bidding process.”

The letter from the 227 lawmakers, which was organized by Rep. Glenn “GT” Thompson (R-PA), as well as the Tennessee delegation’s letter, came after analysis in early May showed that more than 30 percent of Round Two contract holders did not possess licenses or permits in some or all of the states for which they held contracts.

For instance, more than 20 percent of all contract winners in Tennessee do not have licenses required by the Volunteer State to legally provide services to patients.

Other examples exposed by the analysis:

• Fifty-two percent of contracted suppliers in Washington, Baltimore and Philadelphia bid areas lack the required RSA license to provide DMW services in the state of Maryland.
• Twenty-eight of the 79 providers that signed contracts for Richmond, Va. do not have required Board of Pharmacy permits.
• In South Carolina, more than 50 percent of providers holding contracts do not possess the required licenses or permits.
• More than 90 contracts for Ohio were signed by companies not qualified to provide services to beneficiaries in the Buckeye State.

Thompson criticized Tavenner for failing to address the failures and abuses that have occurred under Round Two.

“CMS has broken its own rules and the Administrator has neither addressed how these abuses occurred nor what corrective actions the agency will take,” he said. “Unfortunately these failures are not limited to Tennessee, rather they illustrate widespread systemic flaws that have plagued the program.  If the Administrator is incapable of rectifying this situation before July 1, alternative actions must be considered.”