Rules of Networks
Per CMS, small suppliers have the option of joining a network for bidding purposes. CMS believes this will allow small suppliers the opportunity to lower bidding costs, expand service options, and/or attain more favorable purchasing terms.
Should a group of small suppliers decide to form a network, the following guidelines must be met:
- A single legal entity must be formed for the purpose of submitting a bid as a network.
- All legal contracts must be in place and signed before the network entity may submit a bid.
- The network may not include more than 20 members.
- Only small suppliers that are unable independently to serve the entire CBA may join the network. A small supplier is defined as one that generates $3.5 million or less in total average annual receipts, including Medicare and non-Medicare revenue.
- Network members can only join one network per product category per CBA.
- Network members may not bid separately for the same product category for which the network submits a bid in the same CBA.
- One supplier must be designated as the primary supplier. The primary supplier should complete and submit bid forms A and B. The primary supplier must submit all associated required hardcopy documents from all network members in one package.
- Each member of the network must sign a certification statement specifying that the supplier joined the network because it is unable independently to furnish all of the items in the product category for which the network is submitting a bid to beneficiaries throughout the entire geographic area of the CBA.
- The network must identify itself as a network and identify all members of the network in the bid application.
- Each member of the network must be independently eligible to bid.
- For bid evaluation purposes, a network’s combined total market share for each product category cannot exceed 20 percent of the Medicare demand for that product category in the CBA at the time of bidding. However, once a network receives a contract, the network may expand and exceed the 20 percent capacity.
- A supplier can join different networks for different product categories or in different CBAs.
- The network cannot be anticompetitive. We will refer any suspected cases of federal antitrust violations to the Department of Justice for review.
- Each member of the contracted network will submit its own Medicare claims and will be paid directly by Medicare for products and services it furnishes under the Medicare DMEPOS Competitive Bidding Program.
- Each member of a network must furnish all the items in the product category for which the network is awarded a contract.
- Each member of the network must satisfy all required accreditation requirements, and quality and financial standards, and is responsible for the quality of the products, care and services provided to Medicare beneficiaries. If any member of the network is not compliant with these requirements, the network contract may be terminated.
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