From the Desk of Mark Higley: What You Missed from the Round 2 Recompete Update

Posted on in Billing/Reimbursement, HME Government Issues

First of all, let me offer a sincere thank you to all of the 250-plus providers who attended the March 27 webinar. As with many of the issues I regularly offer to VGM members (there has to be a more appropriate word than “offer;” maybe “elucidate,” “justify,” “rationalize”??...oh well), this topic was a tough one. Not a lot of good news. The second half of the nationwide implementation of competitive bid rates is still scheduled for July, the new Round 2 “Recompete” payments were announced and CMS released a rather vague rule that, at first glance, appears to potentially ease the transition of a bid contract from one supplier to another. But, we’re still left with more questions than answers. 

Did you miss the webinar? No problem. These issues and many more are addressed online now via the webinar recording titled “Round 2 Recompete Information” and PowerPoint slides at

Some thoughts…

  • Many suppliers – and comparatively more than in previous rounds – are reporting they are not accepting some or all of the contract offers. We also received numerous anecdotes of CBIC representatives contacting offerees days prior to the March 31 deadline requesting a timely decision.

    Why? Sure, lower single-payment amounts (see the AAH PDF below), but also the new category combinations. Many bid (again) out of their local areas only to recognize the CPAP contract comes with oxygen service, and the walker contract is tied to K0823 power chairs. So, what is the bottom line? There will more than a few supply shortages. Expect a second round of contract offers with a shorter acceptance timeline this month. At the same SPA…unfortunately. 

  • Many companies called with questions as to how to calculate the total reimbursement for oxygen, capped rental and the power wheelchairs that were previously offered as first-month purchase option. They asked questions such as, “I see the SPA – do I take that by 10? 13?” The answer is no. And all three are different. See the webinar PowerPoint slides for a step-by-step. It’s easy. 
  • Another common question was, “Who won?” (Actually let me take that back. I opine nobody “wins” at these rates.) The answer is unless a company tells you about its offer, no one knows. Again, there will likely be several additional contract offers forthcoming. When the supply/demand equation is met in all the CBAs, there will be a CMS/CBIC release with the final array of contracted suppliers. This will probably occur in May. Do you want to look up specifics of what supplier is contracted with a particular ZIP code/category and with manufacturer/model information? Sometime in May or June this site will be populated; you can look now for current contractors:
  • Another statement I’m hearing is the following: “I think I’m going to sell my contract for respiratory. I don’t really service (fill in the CBA).” Well, you’re likely going to be surprised - more likely disappointed - if you believe the process is going to be simple. The Final Rule that offered this “carve-out” potential was directed toward multi-location and multi-line operations. (See my PowerPoint slides for additional explanation and a good visual.) 

In any case, let me offer this from my friend and colleague, attorney Jeff Baird:

CMS guidance indicates that the portion of the CB contract to be ‘carved out’ must be a ‘distinct line of business’ with separate financials. Assuming that the CBIC does not require the ‘distinct line of business’ to be owned by a separate legal entity (with its own Tax ID #), then the question becomes: ‘What is a distinct line of business?’ At this point in time, the answer is unclear. The CBIC will publish additional guidance on this after all of the executed Round Two Recompete contracts are posted on Connexion. Further, the determination as to whether a portion of a contract can be ‘carved out’ will be made by the CBIC on a case-by-case basis.”   

To view the AAH Round 2 Recompete v Prices in Effect Graphic, click here.

Confused? Stay tuned. We’ll be there for you. As always, contact me with specific questions or concerns at [email protected], 888-224-1631 (O) or 319-504-9515 (C).