Bidding in Round Two? These are the codes that COUNT!

From: VGM

As I have explained numerous times in conversations with VGM members and in seminar sessions, of the almost 400 codes available in the nine categories only a handful of codes actually affect your overall composite bid.

Simply stated, your composite bid compares you to your competitors that are also vying for a contract in your CBA.  Assuming other qualifications are met (e.g., financial, licensing, accreditation et al) the program is purely a mathematical function. 

The link below includes about two dozen codes that impact the composite bid greater than 5%.   What this means is that the great majority of the remainder of the codes may be bid with MINIMUM discount (even $.01 off the current allowable) and not lower the composite bid more than a few cents…or less.  Again, you do NOT NEED TO DISCOUNT ALL CODES in the category the same amount.  If you, for example, wish to offer a bid in the hospital bed category of 15% off the current allowable, you could discount E0260 only; it represents about 90% of the weighted composite bid.  40 other codes collectively make up less than 1 percent (!).

Bottom line:

Your bid strategy should be focused on a small number of HCPCS codes within a given Product Category.  The majority of included HCPCS codes have such a minimal impact on the bid determination as to be practically irrelevant.

Discounting items with small Bid Values will not likely help you win a bid but will almost certainly hurt you when the winning bid rate (fee schedule) is determined for each of the HCPCS codes within the Product Category.

Email me with questions at mark.higley@vgm.com.

HCPCS Round 2 Impact Codes