As details about the restart of Medicare competitive bidding for durable medical equipment continue to emerge, the Centers for Medicare & Medicaid Services (CMS) has published a fact sheet for small suppliers who want to participate.
The Small Supplier Considerations fact sheet, released June 4, said that in accordance with the Social Security Act, CMS is taking “appropriate steps to ensure small suppliers of items and services have an opportunity to be considered for participation in the Medicare DMEPOS CBP [durable medical equipment, prosthetics, orthotics and supplies competitive bidding program]. A small supplier target and the ability to network are two provisions that help foster small supplier participation in the DMEPOS CBP.”
The fact sheet identified small suppliers as those with gross revenue of $3.5 million or less annually in receipts, a total that includes both Medicare and non-Medicare revenue.
“The program aims to have at least 30% of contract suppliers be small suppliers,” the fact sheet said. “During bid evaluation, qualified suppliers who meet all program eligibility requirements and whose composite bids are at or below the pivotal bid are offered contracts first. If the 30% small-supplier target is not met from that group, additional contracts are offered to qualified small suppliers with composite bids above the pivotal bid. This process continues until the 30% target is reached or no more qualified small suppliers remain for that product category in the competitive bidding area (CBA).”
CMS added, “Single payment amounts are calculated before the small supplier target process begins and do not change as a result of the small supplier target process.”
Small suppliers can also band together to form a network, defined as at least two, but not more than 20 suppliers — a total size that could make those suppliers capable of furnishing all items in a product category throughout the geographic area of a CBA.
“Each network must form a single legal entity that acts as the bidder and submits the bid,” the fact sheet said. “If any single member is found to be ineligible without at least one other network member able to satisfy the requirement (i.e., meeting a licensure requirement for a particular state/territory), the entire network is disqualified from receiving any further consideration.” The network is also disqualified if one or more suppliers withdraw after the bidding process closes, but before contracts are awarded.
CMS revealed additional competitive bidding details, including lead items and pricing, on June 4.
