What Is the Bona Fide Bid Requirement?
Under the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP) regulations, every bidder must submit a bona fide bid that complies with all the terms and conditions specified in the Request for Bids (RFB) Instructions (see 42 CFR § 414.414(b)(4)). Per42 CFR §414.402, a bid means an offer to furnish an item or items for a particular price and time period that includes, where appropriate, any services that are directly related to the furnishing of the item or items. A bona fide bid is a bid amount for a particular lead item that passes scrutiny as a rational and feasible bid for furnishing the lead item and all non-lead items in the product category throughout the entire competitive bidding area (CBA).
What Should Your Bid Cover?
As a bidder, you will only submit a bid amount for the lead item in each product category. However, your bid should consider all anticipated costs (including overhead) and desired profit associated with furnishing both the lead item and non-lead items in the product category throughout the CBA. In accordance with 42 CFR § 414.416(b), the single payment amount (SPA) for non-lead items is based off the SPA for the lead item and calculated for all non-lead items in the CBA and product category combination (competition). Please refer to the Lead Item Pricing Calculator to determine the impact of your bid amount for the lead item on the potential SPAs for the non-lead items in the product category, and the Lead Item Bidding and Pricing fact sheet for more information on the lead item pricing methodology.
How are Bids Evaluated?
The Competitive Bidding Implementation Contractor (CBIC) reviews every bid to ensure that it is bona fide or passes scrutiny as a rational and feasible bid for furnishing the lead item and all non-lead items in the product category throughout the entire CBA. Your bid amount will be evaluated and compared to all other bidders’ bid amounts submitted for the same lead item.
What If the CBIC Questions Your Bid?
If your bid raises concerns, the CBIC may ask you to upload the following through Connexion, the DMEPOS CBP’s secure portal:
- A narrative rationale – explaining how you can furnish the lead and non-lead items at your bid amount; and
- Supporting documentation – proving you can furnish the lead and non-lead items for less than your bid amount.
Acceptable Documentation
Acceptable documents include, but are not limited to:
- Manufacturer invoices
- Receipts (including retail sales receipts)
- Letters of intent from manufacturers or wholesalers
- Manufacturer price lists
- Signed written quotes
Documentation may come from manufacturers, distributors, retail or internet sales facilities, or any other sources.
Important Documentation Requirements
Documentation must:
- Clearly identify the specific lead item Healthcare Common Procedure Coding System (HCPCS) code being verified.
- Display the contact information for the source (e.g., manufacturer, distributor) for verification purposes.
What Happens If You Don’t Respond?
If the CBIC requests documentation and you either don’t respond or your documentation doesn’t support your bid amount, your bid for that competition will be disqualified.
Common Reasons a Bid May Be Found Non-Bona Fide
Watch out for these common mistakes:
- Entering the wrong amount by accident (e.g., transposing numbers, leaving out a zero)
- Submitting a bid amount that does not reflect consideration of the anticipated costs (including overhead) of furnishing the lead item and all non-lead items throughout the entire CBA, and desired profit
Before You Submit
Carefully review your bid before you certify your bid. Bid amounts may be amended while the bid window is open, but bid amounts cannot be amended after the close of the bid window.