Question & Answer

Sunday, June 30, 2002

TALLAHASEE, Fla. - The state's providers have put the Agency for Health Care Administration (AHCA), which administers the Medicaid program, in the hot seat for competitively bidding oxygen equipment and supplies and hospital beds. They've fought the agency tooth and nail, even going so far as to file a lawsuit. Now that AHCA has released its "notice of intent to award" bids for the project, providers'disapproval has only deepened. As many providers feared, AHCA placed more emphasis on cost savings than technical scores. Also, providers are scoffing at the agency having initially awarded a bid to a company whose owner is reportedly having his Medicare and Medicaid licenses yanked at another company he owns. But Connie Ruggles, senior management analyst for the deputy secretary for Medicaid, said there's a rhyme and a reason to it all.

HME NEWS: How were the winning bidders selected?

CONNIE RUGGLES: We had an evaluation team sit down with all 19 proposals and review each of them for technical purposes. What was their background and experience? What did they have for staffing? What areas did they propose to serve? Then we assigned a score to each criterion from zero to five, with three being the average. At this point, we hadn't seen the cost proposals. Those were submitted separately. We tallied each technical score, and the top scorer in each region received 400 points. The remaining proposals got a proportional amount below 400 points. Then we opened the cost proposals. For those, we asked them to give us the percentage discount they'd be willing to give us for each of 35 procedure codes. The proposal that showed us the greatest cost savings received 600 points. Then we totaled the scores.

HME: Why were more points given for cost savings?

RUGGLES: We are under a mandate to effect a certain level of savings. We also made the assumption that all of these companies had already met criteria to be licensed DME providers. So we put more emphasis on the cost factor.

HME: Are you confident the winning bidders can handle the regions they've won?

RUGGLES: One of the things we looked at was the location of their offices and the staffing capacity. When we sign contracts, there will be performance provisions. A company that doesn't perform will be sanctioned or lose his contract.

HME: How much does AHCA think it will save with competitive bidding?

RUGGLES: Based on the proposed savings from the people that scored highest in this procurement, in one year, we'll save $4.5 million. That's if you applied those discounts to 2000-01 rates.

HME: What were the discounts proposed?

RUGGLES: They were different for different bidders. In the Pensacola area, the discount was 16% across the board. It was the same for Tallahassee, Gainesville and Jacksonville. In the St. Petersburg area, it was 28%. In Tampa, it was anywhere from 1% to 45% depending on the code. In Orlando and Fort Myers, it was 16%. HME