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Round 2 Recompete: Higley Answers Frequently Asked Questions

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Round 2 Recompete: Higley Answers Frequently Asked Questions

By Mark Higley, VGM Regulatory I want to address some of the most basic and common issues I’m hearing about Round 2 recompete. As more questions are submitted to my office, I’ll make sure to address them in future articles as well. Many of the overall frequently asked questions are addressed in the official RFB instructions. I urge all bidding companies to read the instructions in their entirety. Click here to link to the instructions. And more answers are included in the VGM website dedicated to competitive bidding information located at www.vgmncbservices.com. Start by going to the VGM website to view the PowerPoints and webinar recording. Also, open up the bid worksheets applicable to your CBA. I’ve posted bid preparation worksheet instructions to help you. Previous bid rates (single payment amounts) from the last two programs are posted on our site. I am not suggesting that you emulate the previous amounts (by discount percentage), but it is a common question I receive. I also want to remind all bidding companies that both the VGM and official CBIC worksheets include the 2015 upper bid limit. Your starting point is the 2015 fee schedule. (For example, a month of rental oxygen is $180.92). Your starting point is NOT the current payment amount from Round 2 (e.g. $90.00 monthly oxygen). Further, most of the “financial documentation” issues are adequately addressed on this page. Click here. So let’s move on to a topic that is not sufficiently covered within the official pages. We’ll be discussing these and more topics in my bid worksheet demonstration on Feb. 26 too, so make sure to sign up. Why does it appear that the Round 2 single payment amounts for power wheelchairs are higher than the “bid limit” of the Round 2 recompete? First of all, this cannot be possible. Remember the bid limit is the 2015 full fee schedule. So what are they doing wrong here? Providers are taking 10 times (10X) the RR (rental) payment amount from the Round 2 results. For capped rental items and power wheelchairs (that used to be paid for with a first month purchase option), the CBIC prints the first month payment as the “single payment amount.” That’s the problem here! Suppliers are not paid that amount for the entire period. They are paid 105% of the purchase price of the item whether it is capped rental (e.g., CPAP) or power wheelchairs. Let’s do the math!

Capped rental items (again think CPAP) are paid from the purchase price at 10% for three months and then 10 more months at 75% of that 10%, or 7.5%. So if in Round 2 the bid limit for E0601 was $1,100 and bidders bid it down to $700, CBIC would indicate a single payment amount for the first month’s rental of $70.

Assuming the CPAP was paid for in 13 months, the reimbursements would look like this:

($70 * 3) + (75% of $70 * 10)

($210) + ($525)

= $735, or 105% of the bid purchase price.

If you want a short cut, you will note that the government pays you 10.5 times the SPA. Again, the SPA listed in the official bid fee schedule is ONLY the first three-month rental amount. But:

Group 2 power chairs still get 105% but the ending of the purchase option changed the payment to accelerate reimbursement from other capped rental items.

The schedule is 15% for the first three months (instead of 10%). Then the amount reduces to 6% of the purchase price for 10 more months.

15+15+15 = 45% paid in the first three months. (6 * 10 months) or 60% is paid in the next 10 months. Again…105% of the bid purchase amount.

It’s the same math, just front-loaded. The SPA in the official site for a $3,000 chair would be $450, which is 15%.

Providers who emailed us questions thought the figure to be used would be $450 times 10 ($4,500), and that’s why their numbers were way off when comparing the Round 2 SPA with the Round 2 recompete bid limit. Does this make sense? I will provide more FAQs shortly and make sure they’re included in Connect. Also, make sure to sign up for the Round 2 Recompete Bid Worksheet Demonstration on Feb. 26. Round2RecompeteImage

 

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