Disqualified contract suppliers speak out

NASHVILLE, Tenn. - Industry stakeholders and lawmakers have made an example out of them in their fight against competitive bidding, but some disqualified contract suppliers for Tennessee say the issue isn't that black and white.

“There is more than meets the eye, and it's not just a few lazy suppliers,” said a disqualified contract supplier that asked not to be named.

First, there's the confusion over when providers had to meet the licensure requirements in Tennessee. Per CMS's rules, providers had to meet licensure requirements in the areas where they submitted bids by March 30, 2012, a deadline that was later extended to May 1, 2012. But the agency on April 16, 2013, notified contract suppliers for Tennessee that they had until July 1, 2013, to meet a state requirement: maintain a physical location that is enrolled with Medicare and licensed.

David McCay says his company, Jackson, Miss.-based M-D Medical Services, received and accepted a contract for enteral nutrients for Tennessee, and has been disqualified even though he has opened an office in Memphis and has a current license in the state.

“We have the office and the license, and still they've revoked our contract just days before the implementation date,” said McCay, owner and president.

McCay was told by the Competitive Bidding Implementation Contractor (CBIC) that his company was disqualified because the office wasn't enrolled with Medicare by May 1, 2012. McCay says he submitted an enrollment application by May 15, 2013, the deadline indicated in the April 16, 2013 letter, and is in the middle of completing the process.

“No one was going to have a location enrolled with Medicare by May 1, 2012, unless they were already in Tennessee,” he said. “Enrolling with Medicare isn't instantaneous.”

Secondly, some disqualified contract suppliers resent what they call a “witch-hunt” against out-of-state providers. They say they submitted bids in areas where they didn't have a presence as a strategic business decision to make up for lost revenue with increased volume. Others take it a step further and say having a physical location is unnecessary for certain products.

“We're a mail-order business—that's our MO,” said a disqualified contract supplier that asked not to be named. “We do CPAP through the mail—when we can't satisfy customers, we help them go through a local provider—and in every other state besides Tennessee, pre and post-competitive bidding, that is fine.”

Ashley Plauche, acting executive director of ATHOMES, the state HME association in Tennessee, says industry stakeholders aren't trying to “chase out legitimate companies.”

“We'd like to help those with issues,” she said. “But we want to make sure it's a fair playing field.”

Meanwhile, McCay, who has invested upward of $30,000 setting up shop in Memphis, has to notify customers that his company has been disqualified.

“As soon as we tell them we can't provide for them anymore, we'll have to shut down the office, even though we have a license,” he said.