1. Competitive Bidding Acquisitions, “Carve Outs,” and Subcontracting: Competitive Bidding Acquisitions, “Carve Outs,” and Subcontracting: Real World Tips and Advice WEDNESDAY, JUNE 15 4PM-5PM

3. To begin, let’s find out how to access the contract suppliers by area of the country and by product category…start with Googling this term…

4. nce more Type in a ZIP Code and check a product category

6. http://www.vgmncbservices.com/

22. How is this done?  Update the 855S with the NSC.  After the 855S is processed, ABC will need to submit the Contract Supplier Location Update Form to the CBIC to have ABC’s new PTAN added to the CB contract.  Where is that form??

25. http://www.dmecompetitivebid.com/Palmetto/C bicrd2Recompete.Nsf/files/23_R2RC_Fact_Sheet_ CHOW.pdf/$File/23_R2RC_Fact_Sheet_CHOW.pdf

30. What is the novation agreement?  A novation agreement is the means by which CMS transfers a DMEPOS Competitive Bidding Program contract from one supplier to another.  This agreement is a legal document that is signed by all parties involved in the contract transfer – the seller (transferor), the purchaser (transferee), and CMS. A novation can only occur after a CHOW has occurred.  While a purchasing agreement (e.g., bill of sale) that supports the novation agreement may contain contingencies, the novation agreement may not contain any contingencies.  CMS will review all novation agreements and will only accept those that assign all applicable contract supplier obligations to the purchaser.

32. A sample novation agreement, containing all of the above clauses, can be found at Federal Acquisition Regulation 42.1204. A sample novation agreement, containing all of the above clauses, can be found at Federal Acquisition Regulation 42.1204. (https://www.acquisition.gov/sites/default/f iles/current/far/html/Subpart%2042_12.html )

33. Submitting Information to the CBIC  Fax: 803-264-6228  Mail: Palmetto GBA Competitive Bidding Implementation Contractor 2743 Perimeter Pkwy Ste 200-400, Augusta, GA 30909-6499

34. What else?

35. http://www.dmecompetitivebid.com/P almetto/Cbicrd2Recompete.Nsf/files/2 3_R2RC_Fact_Sheet_CHOW.pdf/$File/2 3_R2RC_Fact_Sheet_CHOW.pdf

42. Lastly….Subcontracting Lastly….Subcontracting.

43. What is a subcontract?  A subcontract is an agreement between a Bid Winner (the Contractor) and another Supplier (the Subcontractor), whereby the Subcontractor agrees to support the Contractor in fulfilling its obligations under the Bid.  As part of furnishing the item, the primary supplier is responsible for the overall service of furnishing the item and coordinating the care for the beneficiary in compliance with the physician’s order and Medicare rules and guidelines, but the primary supplier may subcontract certain services.

44. LEGITIMATE PURPOSES FOR SUBCONTRACTS  Product Line Support (Supplier does not have the inventory capacity to fully service CBA)  Geographic Support (Supplier cannot deliver throughout the entire CBA.)  Personnel Support (Supplier does not have the personnel capacity to service CBA)

45. Product Line Support  Quantity of product  Specific products  Delivery of product  Consignment vs Lease Models

46. Consignment Option  “(Contractor) shall make available to Subcontractor and replenish as needed a mutually agreed Inventory, and Subcontractor agrees to hold such Inventory at Subcontractor’s place of business in consignment and to store and dispense the Inventory as provided in this Agreement.  (Contractor) will conduct a reconciliation between the Inventory record in the (Contractor) system and the Inventory consigned to Subcontractor.  The first reconciliation will be done within six (6) months after July 1, 2013 and again annually thereafter. Title to items of Inventory consigned to Subcontractor remains in (Contractor).”

47. Cpap and Bilevel Example  “Contractor will contact the patient after we receive the Pap referral and ship the necessary equipment to the patient for the appointment with the sub ‐ contractor.  The subcontractor will set an appointment with the patient to come into their office for set up.  The subcontractor will set a Contractor owned machine and instruct the patient on proper use. Fitting the Contractor mask for the patient is also part of initial set up.  Contractor is responsible for the collection of paperwork and compliance information. Contractor is responsible for billing Medicare and collecting co ‐ payment.”

48. Wheelchairs/Scooters/Power Mobility Example:  Contractor will contact the patient after we receive the wheelchair referral and ship the necessary equipment to the subcontractor for the home delivery.  The subcontractor will set an appointment with the patient to deliver the equipment.  The subcontractor will deliver Contractor owned equipment and instruct the patient on proper use. The subcontractor will return the delivery paperwork to Contractor once complete.  Contractor is responsible for billing Medicare and collecting co ‐ payment.

49. Oxygen Leaseback Option  “(Contractor) will pay subcontractor a monthly fee for the lease of the subcontractor equipment. Contractor also pays for the dispatch of drivers for various items described in the fee schedule.  Contractor will be responsible for the supply of soft goods after the initial set up.  Contractor is responsible for collecting paperwork.  Contractor is responsible for billing Medicare and collecting co ‐ payment.”

50. Support Surfaces/NPWT/Hospital Bed Leaseback Example:  Contractor will pay subcontractor a monthly fee for the lease of the subcontractor equipment.  Contractor also pays for the dispatch of drivers for various items described in the fee schedule document. Contractor is responsible for collecting paperwork.  Contractor is responsible for billing Medicare and collecting co ‐ payment.

51. Walkers:  Contractor will pay subcontractor for deliveries of hospital orders only.  Contractor will drop ship to patient all other orders.

52. Subcontractor services may also include:  Basic non-evaluative order intake  Billing  Collection  Delivery  Set-up  Maintenance  Warehousing  Therapy support  Troubleshooting  Clinical support

54. Fees…  Pay by service  Pay by time  Pay rolled up into equipment fee  Fee must tie to services, not profits or referrals  Subcontractor looks solely to Contractor for payment  Set fees onto Exhibit, to make amendments easier  Invoice required  Timing for payment

55. DOCUMENT TERMS  At least one year (safe harbor)  Early termination okay if no reactivation within year  Maximum 3 years to reflect bid term  Tie explicitly to CBIC contract  Termination without cause? 90 days?