Competitive Bidding: Survival Steps If You Are Not a Successful Round 2 Bidder

Apr 4, 2012 9:00:07 AM / by ACHC

Survival Steps If You Are Not a Successful Round 2 Bidder

For the HME supplier who is not awarded a competitive bid contract, the supplier can no longer bill Medicare in its CBA for products covered by competitive bidding. There is no good way to paint such a scenario in a positive light. The following are steps that a HME supplier can take if it is not awarded a competitive bid contract.

Continue as a Grandfathered Supplier

There will be a “grandfathering” process for oxygen equipment and supplies; inexpensive or routinely-purchased items furnished on a rental basis; items requiring frequent and substantial servicing; and capped rental items furnished on a rental basis. Only HME suppliers that began furnishing these grandfathered items prior to implementation of competitive bidding may be eligible to participate as a grandfathered supplier. If a HME supplier chooses to be a grandfathered supplier, then it must do so for all beneficiaries who request the services. For items requiring frequent and substantial servicing and oxygen equipment, the grandfathered supplier will be paid the bid payment amount. For capped rental items and inexpensive or routinely-purchased items, the grandfathered supplier will be paid the lower of the actual charge or rental fee schedule amount.

Expanding Into Geographical Areas Outside CBAs

A DME supplier can open up one or more locations outside a CBA and concentrate on servicing customers in the outlying areas.


Opportunities will avail themselves to work with CBA bid winners. Develop relationships with bidding organizations and position your organization to work with bid winners. Have your subcontracting contracts reviewed by a healthcare attorney. There are many potential pitfalls in subcontract agreements.

Products and Services Not Included in Competitive Bidding

Suppliers should focus efforts to sell products not covered in the competitive bidding program’s product categories. Look for opportunities to sell health products outside of your traditional product offerings.

Cash Sales

One of the fall outs of healthcare reform will be the increased complexity for a Medicare beneficiary to obtain medical equipment. With difficult coverage requirements many clients will be forced to purchase products and services on their own as coverage through Medicare will be more challenging.


The hospice benefit paid to the hospice facility includes the equipment and products used to service the beneficiary. Hospices may purchase or rent this equipment directly from DME suppliers.

Long Term Care Facilities/ACLF’s

Some residents in long term care facilities may receive HME reimbursed by Medicare Part B as if those patients were residents in their own homes. For those long term care facilities that are not paid a per diem rate for the patient’s care HME suppliers may either bill Medicare directly for provision of the equipment or in some cases facilities may choose to contract with the DME supplier.

VA Hospitals and Facilities

The VA is a large purchaser of HME and routinely sends out requests for proposals asking that HME suppliers submit a bid to different VA regions or facilities that service patients. The VA purchases a majority of its requirements for direct delivery through its local Acquisition and Material Management office. Contact each facility for inclusion in its procurement process. Find a facility near you here:


TRICARE is the health care program for uniformed service members, their families, and survivors. TRICARE is another large purchaser of HME which offers both contract and non-contract opportunities for suppliers. TRICARE uses military treatment facilities as the main delivery system and augments direct care with a network of civilian providers and facilities. The program is available worldwide and managed regionally in six separate TRICARE regions.

Workers Compensation

There are workers compensation programs at both the federal and state levels. These insurance programs are another source of business for HME providers. Each of these programs has its own system for enrolling providers.

Resort/Hotels and Travel Clients

Many large resort hotels have begun providing wheelchairs, scooters, and other medical equipment to their guests as a way of making the guests feel more at home. HME suppliers that are located in markets with large hotels and casinos should contact the hotels directly to determine if there is a contracting process and how suppliers may participate. Large travel agencies that focus on foreigners traveling to the USA are another good source of referrals. 919.785-1214.

Topics: Accreditation, ACHC, Competitive Bidding Program, DMEPOS, Durable Medical Equipment, Losing Round 2 Bid, TRICARE, VA


Written by ACHC

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