Some contract suppliers may not meet requirements

YARMOUTH, Maine - As HME stakeholders continue to pore over the list of Round 2 contract suppliers, it's become more and more clear that some may not meet various licensing requirements—a condition of winning a contract.

“How are they granted awards if they didn't meet state qualifications for licensure?” asked Jeff Mastej, director of compliance and audits for Dearborn, Mich.-based Wright & Filippis.

In Tennessee, for example, out-of-state contract suppliers received a letter from the competitive bidding implementation contractor (CBIC) on April 16 reminding them that they must “comply with all state and local laws, including applicable licensure requirements.” For Tennessee, that means providers must have a physical location within the state. The letter states that contract suppliers have until July 1 to meet the licensure requirements.

“That's just not going to happen,” said James Herren, executive director of the Association for Tennessee Home Oxygen & Medical Equipment Services. “The state licensure department is overwhelmed with phone calls from people saying, 'I didn't know.'”

Herren said the state has told him it is investigating as many as 50 companies.

Even the July 1 deadline cited in the letter appears to be in conflict with CMS's own bidding rules, which state that providers must have met licensure requirements by May 1, 2012, with a copy on file with the National Supplier Clearinghouse, stakeholders say.

“Our licensure law has been in effect for about 13 years,” said Herren. “For either CMS or bidders to say they didn't know you had to have a license is laughable. Those bids should be invalid.”

Another example: In the Detroit CBA, providers of hospital beds must have a “bedding and furniture permit,” according to stakeholders.

“There is an issue of whether or not CMS actually checked state and local licenses for various bidders,” said Barry Cargill, executive director of the Michigan Association for Home Care. “I think many people involved in the bidding process were not even aware that this was there.”

The big question now: What happens if contract suppliers were awarded contracts when, technically, they should not have been? The letter to suppliers in Tennessee states that failure to comply with licensure requirements or any other requirement outlined in the contract will result in a breach of all of a supplier's contracts.