Request for Proposal



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Request for Proposal

Volunteer State Health Plan

TennCare Networks

Durable Medical Equipment

Suppliers / Managers

I. General Information

A. Purpose/Scope of Proposal:

❖ The purpose of this Request for Proposal (RFP) is to seek bids from and award contracts to Durable Medical Equipment (DME) Suppliers / Managers (Contractors), for provision of the most cost effective and highest quality Home Medical Equipment services for eligible Volunteer State Health Plan (VSHP) TennCare Members. VSHP is a wholly owned subsidiary of BlueCross BlueShield of Tennessee. For more information on TennCare please go to the following link:



❖ Subject to VSHP approval, bidders may propose to implement their contract directly or enter into subcontract arrangements with other DME providers for Home Medical Equipment Services.

❖ The scope of this proposal includes all covered home medical equipment. The suppliers / managers selected must be able to provide and manage home medical equipment services to VSHP TennCare members throughout the state of Tennessee and its contiguous counties.

❖ VSHP reserves the right to carve out certain home medical equipment items and geographical areas from this proposal.

❖ Tennessee DME providers will not be reimbursed for any drugs used in conjunction with home medical equipment.

❖ These contracts will be awarded for an initial multi-year term. After the initial term, the contracts will automatically renew for subsequent 1-year terms—unless terminated by VSHP or the Contractor with 90 days prior written notice.

B. Timeline/Schedule

|Action |Date |

|Request for Proposal Issued |January 10, 2008 |

|Bidder Questions due to BCBST |February 1, 2008 |

|Bidder Response due to BCBST |February 15, 2008 |

|Invitations to Contract Extended |By April 1, 2008 |

|Contracts Implemented |By May 1, 2008 |

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➢ Bidders are invited to submit written questions for clarification about this RFP to BCBST via email, no later than 5:00 EST, February 1, 2008, to kit_dockery@ and susan_dorsch@. Responses to all questions will be posted at within two (2) business days.

C. Response Date, Number of Copies and Format

❖ Bidders should submit two printed copies and two CD-Rom copies of their response(s), using Microsoft Word format. Responses must be received no later than 5 o’clock p.m. (EST), Friday, February 15, 2008. Responses should be submitted to:

Ancillary Contracting

801 Pine Street – 1TC

Chattanooga, TN 37402

❖ Proposals will only be considered if they are complete; including responses to all questions contained within the questionnaire (questions should be restated, and numbered as within the request).

❖ Bidders who fail to respond to this request, or whose responses are not complete as described above, will be sent notification of disqualification from consideration shortly following the request due date. Responses will only be considered if they are complete and received at the above address by 5 o’clock p.m. (EST), Friday, February 15, 2008.

Technical Proposal

A. Selection Protocols

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❖ Volunteer State Health Plan (VSHP) reserves the right to reject any response received as a result of this request. VSHP reserves the right to reject a response at any time during the review process.

❖ All costs of developing responses and any subsequent expenses relating to contract negotiations are entirely the responsibility of the bidder and may not be charged to VSHP.

❖ If it becomes necessary to revise any part of this document, VSHP will issue an amendment to all bidders who received the original request. VSHP will make an effort to summarize in writing all pertinent questions and answers as described above.

❖ Bidders will be bound to the terms of their responses for up to six months following submission, or until such time as the bidder and VSHP have mutually agreed to augment proposed services.

❖ The contents of the responses of the selected bidders will become the basis of the contractual obligations. All other material submitted with the response becomes the property of VSHP and will not be returned. VSHP has the right to use any ideas presented in responses.

B. Criteria-Based Selection Process

❖ Listed below are those principles that will guide bidder selection:

1. Organization & Staffing

➢ VSHP home medical equipment network is comprised of providers with time-tested capabilities in home medical equipment services

➢ Bidder’s organizational structures and ownership interests should be consistent with the objectives of Volunteer State Health Plan and BlueCross BlueShield of Tennessee

➢ Bidder’s organizational structures, ownership interests, or other affiliations should be free of potential conflicts of interest; and

➢ Bidder’s staff should have appropriate credentials and qualifications; training and monitoring of practice patterns should be ongoing.

2. Services & Access

➢ Bidder’s services should be comprehensive and of the highest quality available

➢ Patients and referring physicians should find care accessible and caregivers responsive without exception

➢ VSHP reserves the right to contract as necessary to preserve adequate geographic coverage

➢ Contracted suppliers/managers must demonstrate the capacity to accept additional VSHP patients without diminishing quality or access to service; and

➢ Bidders should be willing to collaborate with VSHP as needed to improve member access to services.

3. Quality & Credentials

➢ VSHP will seek suppliers/managers who are appropriately certified, accredited and licensed, and free of legal or regulatory sanction

➢ Suppliers/managers will handle grievances according to the process mandated by VSHP, and will have capabilities for measuring both quality and patient satisfaction

➢ Subcontractors will be subject to comprehensive credentialing, including verification of certification and licensure, as well as background checks of individual providers. Contracted suppliers/managers should appropriately monitor subcontractors with regard to quality of, access to, and utilization of services

➢ Both management and care suppliers should maintain customer service as a priority--customers may include: patients, families, referring physicians, as well as VSHP; and

➢ While the VSHP medical management program will periodically evaluate organizational performance, continual improvement of staff performance will be the responsibility and expectation of every supplier/manager contracted.

4. Operations

➢ Bidder for TennCare must adhere to the provisions and requirements in the Contract Risk Agreement (CRA) and all amendments as provided in the link stated below:



➢ Bidder must adhere to the provisions and requirements in the VSHP BlueCare Provider Administration Manual. These provisions and requirements will be incorporated into the contract. The manuals are subject to be changed and should be reviewed periodically. Below you will find a link for the manual:



➢ In compliance with 2-10r of the Bureau of TennCare's CRA, VSHP is required to provide a summary of all requests for prior authorization for DME. Bidders will be required to provide to VSHP, on a monthly basis, the prior authorizations from the preceding month. This report must be received electronically, in a specific Excel format as specified in 2-10r in the CRA.

➢ Administrative activities (e.g. record keeping, billing, etc.) should be carried out in a thorough and professional manner as outlined in the VSHP Provider Manual, found at:



➢ Submission of claims should be timely as outlined in the VSHP Provider Manual found at:



➢ Capabilities should provide sufficient flexibility to coordinate operations with those of VSHP and VSHP medical management (e.g. electronic billing).

C. Evaluation Process

❖ The process of evaluating responses will proceed in the manner detailed below:

1. Minimum Selection Criteria

➢ When applicable - Bidder must be licensed to practice in Tennessee and Contiguous Counties – license to practice must be unrestricted as to services performed

➢ Medicare certification or Accreditation

➢ Financial solvency; and

➢ General and professional liability coverage meeting requirements of VSHP or provisions for acquiring such coverage. Minimum Insurance Requirements – Malpractice, Comprehensive Insurance

Bidders who do not meet these Minimum Selection Criteria will be disqualified from further consideration without exception.

2. Basic Selection Criteria

➢ Bidder must have Accreditation by Joint Commission for the Accreditation of Healthcare Organizations (JCAHO), the Community Health Accreditation Program (CHAP) or the Accreditation Commission for Health Care (ACHC)

➢ Bidder must have Medicare Part B Certification, if applicable

➢ Bidder must be free from Medicare sanctions against any person(s) with significant ownership interest

➢ Bidder must not currently be excluded from Medicare, Medicaid, Office of Inspector General (OIG) or Federal Procurement and Non-procurement programs

➢ Bidder must be free from significant Medicare certification deficiencies or deficiencies identified during the course of a Medicare audit

➢ Bidder must be free from outstanding deficiencies in state licensing survey

➢ Bidder must have electronic billing capability and willingness to use VSHP billing format provided

➢ Bidder must provide appropriate client references

➢ Bidder must demonstrates a medical delivery history, which VSHP deems consistent and comparable with bidder’s ability to comply with these standards

➢ Bidder and/or their subcontractors must follow Medicare standards including: (1) Maintain a physical location; (2) Be open and Staffed during Business Hours; (3) Have a visible sign; (4) Have hours of Operations Posted; and (5) Have a business telephone number listed under the name of the business

➢ Bidder must agree to follow Region C DME MAC and VSHP guidelines in claims billing

➢ Bidder agrees not to inappropriately balance bill the member

➢ Bidder must have satisfactory record on fraud and abuse and billing practices

➢ Bidders must abide by Terms of VSHP Provider Dispute Resolution Procedure found at:



➢ Bidder must maintain $1/$3 million malpractice insurance and general liability insurance

➢ Bidder must have current TN home medical equipment license, if applicable

➢ Bidder will be willing to have due diligence review by Delegate Oversight and maintain on-going monitoring with our company; and

➢ Bidder must have the capabilities in place for EFT (Electronic Fund Transfer).

Bidders who do not meet these Basic Selection Criteria will be disqualified from further consideration.

3. Differentiating Selection Criteria

➢ Suppliers/Managers who meet both Minimum and Basic Selection Criteria will be deemed Qualifying responders

➢ The remaining selection criteria detailed within the Technical Proposal will be used as Differentiating Selection Criteria; and

➢ Qualifying responses will be scored for these criteria against VSHP standards of capability. In general, suppliers/managers whose capabilities meet VSHP expectations for future contract years will be favored over those who meet VSHP’s immediate needs without additional capacity or capabilities.

D. QUESTIONNAIRE

Please respond to all questions contained within the questionnaire (questions should be restated, and numbered as within the request). Proposals will only be considered if they are complete; including responses to all questions.

1. Durable Medical Equipment Services Summary

Please provide a Cover letter and a Summary of your understanding of the proposed services. Include a list of any terms and acronyms you have used in your responses to this proposal

2. Organization & Staffing

2.1. Please provide the following:

a. Describe the structure and ownership of your company

b. Legal entity name or full name of supplier/manager

c. List of parties holding an ownership interest in the company

d. Whether incorporated individually or part of a larger business enterprise; and

e. Whether managed or owned by a hospital or management group, including name.

2. Please provide the following in regards to the organizational structure of your company:

a. Describe your organizational structure and provide an organizational chart depicting management

b. Job descriptions for management positions

c. Qualifications of current management; and

d. An explanation of vacancies for each service you are planning to contract.

2.3. Disclose whether Medicare or Medicaid has ever sanctioned any person(s) or organization(s) with over 5% ownership interest in your agency. Please explain and indicate current status of sanction.

2.4. Provide an audited financial statement, your most recent federal tax return, or an Actuarial Certification as demonstration of financial solvency.

2.5. How long has your company been in business?

2.6. How long has your company supplied/managed home medical equipment services in Tennessee?

2.7. Please provide the following information in regards to employees and subcontractors:

a. Are your service providers employees or independent contractors?

b. If they are employees, please provide the number of Full-Time Equivalents (FTEs) and the number of paid employees, by staff/management category; and

c. If you use independent contractors, please describe level of integration with supplier’s operations (i.e. supervision and performance monitoring, training, percent of subcontractor’s business attributable to supplier, etc.).

8. Please provide the following:

a. How you document and monitor the credentials of staff; and

b. The kinds of background checks that are performed (e.g. criminal record, reports of abuse, verification of education and references, etc.).

2.9. Specify procedures regarding hiring practices, including determining legal status to work.

2.10. Please provide copies of your Fraud and Abuse Prevention program and an outline of your program used to educate staff in compliance.

11. Please provide the following information:

a. Do you have an individual dedicated full-time to training and education?

b. How often training programs are reassessed for appropriateness; and

c. Is training linked to performance reviews, to your quality program, to other performance input (e.g. customer satisfaction surveys)? Please explain.

12. Please provide and explain the following information in detail:

a. How often your staff is evaluated for their performance to their outlined job description; and

b. The steps that are taken to correct identified concerns.

3. Services & Access

1. For each of your locations, please provide the following:

a. A list of services provided

b. Indicate service availability in Tennessee and its contiguous counties (if partial counties, please note)

c. Where only limited services are offered, please indicate and explain; and

d. Where additional services are provided, please detail.

2. Please provide the following information:

a. Please advise if you provide services on a 24-hour basis and if so in what manner; and

b. Please describe processes of receiving request for services (from patient, from physician, from emergency department), dispatching care, and following up with regular provider (if applicable).

3. Please provide the following in regards to patient services:

a. The number of patients you service per day.

b. Do you have the capacity to accept additional patients, without diminishing quality or access to services? Explain, indicating capacity

c. If your present capacity is insufficient, please detail your plans for handling the additional business represented by a VSHP contract

d. Describe experience dealing with large fluctuations in service demand

e. Describe what you would classify as a manageable increase in demand

f. Describe how such an increase would be handled; and

g. Describe what would be an unmanageable increase in demand.

4. Please provide the following information regarding your company’s access standards:

a. Travel time as defined by the time it takes a durable medical equipment supplier to reach the patient

b. Distance, defined as street miles between the supplier and the patient; and

c. Service time--time elapsed between the time at which the supplier first becomes aware of the patient and the time at which services are rendered.

4. Quality & Credentials

1. Please provide the following information regarding certification:

a. Is your company Medicare certified? Please submit a copy of the Certification and your most recent deficiency report, as well as the results of any audits conducted

b. What was your Medicare denial rate (most recently available quarterly rate)? Please explain deficiencies and denial rate, steps taken to correct deficiencies or excessive denial; and.

c. Is your company submitting a bid to Medicare for the Competitive Acquisition Program?

4.2. Is your agency accredited by JCAHO, the Community Health Accreditation Program (CHAP), Accreditation Commission for Health Care (ACHC) or equivalent? Please submit a copy of the accreditation letter(s).

4.3. If applicable, provide a copy of your current, valid state license, or documentation from the State of Tennessee advising that licensing is not required, and most recent survey report describing any deficiencies.

4.4. What are the general liability and malpractice insurance coverage levels carried by your agency? Provide a copy of policy face sheet(s).

5. Please provide the following information in regards to lawsuits:

a. Has your agency been involved in any lawsuits in the past five years, including those, which may still be pending?

b. If yes, please describe nature of complaint and disposition/status of case; and

c. Are there any lawsuits pending for which a reserve has been booked in your financial statements?

4.6. Please provide references from three current large clients.

4.7. Please provide the following information in detail:

a. Please describe your process for measuring customer satisfaction (including patients, physicians, other)

b. Indicate how samples are obtained, the total number of customers typically surveyed, and percent responsiveness; and

c. Please provide a copy of the most recent questionnaire(s) administered and results.

8. Please provide the following information in regards to subcontractors:

a. If your services will include the use of subcontractors, please describe how you monitor utilization patterns for patients under the care of subcontractors

b. How routine, as well as urgent communications, are conducted with the payer, physician and patient in such instances

c. Where patient records are kept; and

d. What your procedures are for verifying the credentials of subcontractors, giving attention to each of the areas outlined below:

❑ Organization

❑ Staffing and Qualifications

❑ Services and Access

❑ Quality

❑ Operations

9. Please provide documentation of protocols regarding:

a. Member complaints/grievances tracking and resolution

b. Quality assurance program including: quality of equipment, customer service, turnaround time for filling orders, customer satisfaction goals

c. Performance standards and reporting capabilities

d. Staff competency assessments

e. Patient education

f. Patient care treatment plans

g. Utilization review plans

h. Risk management including infection control, OSHA compliance, and disaster recovery (with regard to patient records, administrative services, and patient care)

i. Patient records; and

j. Confidentiality.

5. Operations

1. Please describe the following:

a. How your company communicates with physicians ordering services

b. Indicate qualifications of the individual(s)-performing intake

c. Describe documentation of communications; and

d. How processes differ after hours.

5.2. Describe your Customer Service operations. Include after hours procedures, hours of Operations/Call Center Hours

2. Please provide the following information regarding patient calls:

a. How your organization documents patient calls

b. Please provide forms used

c. Please advise if this information is aggregated by the supplier/manager for review and analysis; and

d. What information systems (describe functionality, as well as system type), if any, are utilized.

3. Please provide the following information regarding education:

a. The efforts that are undertaken to educate physicians and patients regarding equipment and services your company provides

b. If there are any patient progress reports provided to ordering physicians and/or primary care physicians on a regular basis; and

c. If such a report exists, please provide an example.

5.5. Provide details on your company’s policies and procedures for filling orders.

5.6. Provide details on your company’s capability to carry multiple brands.

5.7. Provide details on your company’s criteria used to select product lines.

5.8. Provide details on your company’s Claims and Information management - Standards, performance, turnaround, information technology capabilities and programs in place.

5.9. Provide detail on system capability for tracking and monitoring equipment. Please provide examples of this reporting system and describe the capabilities of the reporting system. Indicate any interaction with the member in order to monitor utilization.

5.10. Describe your capabilities to capture and report Prior Authorizations.

5.11. Provide detail on handling equipment requests for out of stock or unavailable items.

5.12. Provide details on your company’s technical Expertise – Assistive technology (ATS), Respiratory Therapy, Certifications.

5.13. Describe your return polices for broken or unused equipment.

5.14. Describe policies for Repair and Replacement of equipment.

5.15. Describe your policies on Emergency or Urgent Requests.

16. Provide details on your company’s equipment Usage – volume, repairs, replacement, issues for:

❑ CPAPs

❑ Oxygen

❑ Wheelchairs

❑ Insulin Equipment

❑ Wound Care

5.17. Detail proposed implementation/transition plan to provide minimal disruption of service to members (i.e., phase out capped rentals, policies on allowing members to use previous providers, policies on providing continuous rental items).

5.18. Describe your schedule and procedures for review and renewal of physician orders. Who performs these reviews?

19. Please provide the following information in regards to billing:

a. How your organization bills for services

b. Your ability to bill electronically. If you are able to bill electronically, how long have you had this capability; if not, what are your plans for development of this capability?

c. Your billing turn-around time; and

d. Please indicate willingness to use the billing format outlined in the VSHP Provider Manual, found at:



20. Please provide the following:

a. Describe your philosophy for interaction with the VSHP medical management and disease management programs.

b. The manner that VSHP can support you in improving your organization’s performance; and

c. As a provider, the kinds of efforts your organization would perceive as intrusive by VSHP.

21. For each of the following referral sources, indicate percent of caseload:

❑ Inpatient hospital

❑ Emergency room

❑ Outpatient clinics

❑ Physicians Offices

❑ Nursing homes

❑ Rehabilitative Facilities

❑ Other

22. For each of the following funding sources, indicate percent of caseload:

❑ Self-Pay

❑ Indemnity

❑ Commercial HMO or POS

❑ Commercial PPO

❑ Medicare (traditional)

❑ Medicaid (traditional)

❑ Medicare Risk

❑ Medicaid Managed Care

❑ Indigent

23. Please indicate percent of caseload in each of the following groups:

❑ Pediatric

❑ Adult under 65 years of age

❑ 65+ years of age

III. Cost proposal

Please provide a fee schedule in Excel format with the following columns: HCPCS, Modifier, Brief Description, Maximum Allowable, and Percent of Tennessee Medicare. Insert your proposed rates showing that your company is the most cost effective DME supplier/manager for VSHP. Provide details, including all current 2007 DME HCPCS codes and modifiers, as well as the percent of Tennessee Medicare that your fees represent. Please submit only one fee per HCPCS code/modifier combination. If you are not submitting a proposed fee for one of the DME HCPCS codes, please indicate “No Proposal” in the fee column. Please include the Bidder Name and Contact Information on the proposed fee schedule.

IV. Value Added Services

Since the VSHP program is specific in its fee-for-service approach, the bidder will be challenged to offer a variety of value added services which may include disease management programs, patient education services, treatment plan compliance monitoring, 24 hour on-call service, etc. in your proposal.

VSHP will not directly fund any programs a provider offers or promotes as a value-added service.

The availability and quality of such value added services, plus commitments to improving patient health, a willingness to participate with VSHP in Medical Management programs, etc. are examples of the evaluation criteria upon which a provider’s selection will be based.

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