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[IP] About Competitive Bidders



I. CMS has awarded DMEPOS exclusive contracts to bidders that SUBMITTED

FRAUDULENT BIDS that did not meet CMS' published rules for licensure,

accreditation, and/or certification in the state and/or specific product
category by

the May 1, 2012 bid window deadline. Any bidder which was not licensed or
accredited for a specific produced category should have been eliminated from
the bidding. Yet the facts are that:

-- 33 bid winners do not hold a valid DME license in the state of Tennessee
and so are fraudulent bidders.

-- 68 out of 138 unique bid winners in the State of Maryland do not hold the
necessary Maryland Residential Service Agency (RSA) license and so are
fraudulent bids.

-- 58 of the contracts in the six Ohio bid areas are held by firms that are
not appropriately licensed to provide items in Ohio, and are likewise
fraudulent bids.

-- 31 of the 105 companies awarded contracts in Texas were not licensed under
Texas law as required and so are fraudulent bidders.

-- and each week brings new evidence of additional unqualified companies

- Medicarebs published RFB stated "Bids will be disqualified if a bidder
does not meet all state licensure requirements for the applicable product
categories and for every state in a CBA." If CMS fails to disqualify such
fraudulent bid winners, they penalize the many suppliers that followed the
rules and bid honestly, many of whom would have bid on new areas if they had
known that they didn't have to invest the time and money to be licensed before
bidding. Fraud is fraud, whether payment or contracting, and ignoring it sends
a dangerous message!.

-- Use of the bids submitted by unlicensed bidders to which CMS incorrectly
awarded contracts cannot be used in calculating the Single Payment Amounts
(SPA) because they were illegal. Fraudulent bidding cannot be condoned nor
allowed to influence price setting.

-- CMS helping these winners to get licensed now is wrong. It is likely that
many other bidders were disqualified for lesser problems and are not getting
this bspecialb help to succeed, and others would have bid differently if
the rules had been different for all!

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II. Equally serious are the lack of financial standards for companies
promising huge expansions of services to these medically needy Medicare

-- There are big bwinners" currently serving few patients and with a very
modest revenue stream, but which have been awarded scores, and even hundreds,
of contracts. One example of many: NUTRI USA provides Enteral Nutrients to
about 18 patients, had revenues of $24,000 for a full year and was awarded 82
contracts nationwide for Enteral Nutrients.

-- There is simply no way NUTRI USA, or many others, could pass any rational
financial standards test that would demonstrate the financial and
infrastructure capabilities to very rapidly expand (over 8,000%!!! in a few
months) to serve the seniors and disabled in the vast geographic areas for
which they were awarded contracts.

-- There are many winners which will have to expand several thousands of
percent on July 1st to fulfill their responsibilities to Medicare
beneficiaries. IMPOSSIBLE!

-- Not only were there no financial standards bidders had to meet to prove
their ability to expand, but CMS' bidding system itself transfers the value of
bids from serving seniors to selling bids. No intent necessary to serve
seniors...JUST BID AND RUN!

-- How do the strategies, DRIVEN BY THE CMS BIDDING STRUCTURE, serve the
seniors and disabled who are particularly needy?

The bsmartb thing to do to compete in this game of irrational bids and
extraordinary price cuts is to bid low, win as many bids as possible, and sell
them at as high a price as possible! If you can't sell, just hold, as you are
not required to serve anyone. Eventually the market will crash, the price goes
up, and you can sell, if you haven't gone broke! It's happening just as the
experts predicted, and Cal Tech proved, driven by CMS' flawed design.

In Round 2 the talk on the street is all about such strategies! 11 of the 15
announced winners in the nationwide competition for mail order diabetic
supplies had no plans to serve! Other winners in every category quietly say
the same. Some talk of how to serve only those needing the cheapest supplies
with costs below the median...or just one's old customers! WHO LOSES when the
focus becomes how to exit with your shirt? SICK AND NEEDY SENIORS unable to
find a new supplier! Co-pays become self-pay!

III. Lastly is Round 2's reliance on remote suppliers.

-- The evidence is unequivocal from the Round 1 Rebid: REMOTE
(out-of-area/out-of-state) WINNERS DO NOT PERFORM! But in Round 1only 10% of
the winners were remote.

-- Round 2 removes 90% of the local suppliers right off the top! Then 50% of
the CMS- selected suppliers don't serve because they are remote! CHOICE?
QUALITY? ACCESS? Frail and needy seniors lose. Jobs are lost in your towns.
WHY???? Is this American?

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