Medicare DMEPOS Competitive Bidding Improvement Act of 2015

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare DMEPOS Competitive Bidding 
Improvement Act of 2015''.

SEC. 2. REQUIRING BID SURETY BONDS AND STATE LICENSURE FOR ENTITIES 
              SUBMITTING BIDS UNDER THE MEDICARE DMEPOS COMPETITIVE 
              ACQUISITION PROGRAM.

    (a) Bid Surety Bonds.--Section 1847(a)(1) of the Social Security 
Act (42 U.S.C. 1395w-3(a)(1)) is amended by adding at the end the 
following new subparagraphs:
                    ``(G) Requiring bid bonds for bidding entities.--
                With respect to rounds of competitions beginning under 
                this subsection for contracts beginning not earlier 
                than January 1, 2017, and not later than January 1, 
                2019, an entity may not submit a bid for a competitive 
                acquisition area unless, as of the deadline for bid 
                submission, the entity has obtained (and provided the 
                Secretary with proof of having obtained) a bid surety 
                bond (in this paragraph referred to as a `bid bond') in 
                a form specified by the Secretary consistent with 
                subparagraph (H) and in an amount that is not less than 
                $50,000 and not more than $100,000 for each competitive 
                acquisition area in which the entity submits the bid.
                    ``(H) Treatment of bid bonds submitted.--
                            ``(i) For bidders that submit bids at or 
                        below the median and are offered but do not 
                        accept the contract.--In the case of a bidding 
                        entity that is offered a contract for any 
                        product category for a competitive acquisition 
                        area, if--
                                    ``(I) the entity's composite bid 
                                for such product category and area was 
                                at or below the median composite bid 
                                rate for all bidding entities included 
                                in the calculation of the single 
                                payment amounts for such product 
                                category and area; and
                                    ``(II) the entity does not accept 
                                the contract offered for such product 
                                category and area,
                        the bid bond submitted by such entity for such 
                        area shall be forfeited by the entity and the 
                        Secretary shall collect on it.
                            ``(ii) Treatment of other bidders.--In the 
                        case of a bidding entity for any product 
                        category for a competitive acquisition area, if 
                        the entity does not meet the bid forfeiture 
                        conditions in subclauses (I) and (II) of clause 
                        (i) for any product category for such area, the 
                        bid bond submitted by such entity for such area 
                        shall be returned within 90 days of the public 
                        announcement of the contract suppliers for such 
                        area.''.
    (b) State Licensure.--
            (1) In general.--Section 1847(b)(2)(A) of the Social 
        Security Act (42 U.S.C. 1395w-3(b)(2)(A)) is amended by adding 
        at the end the following new clause:
                            ``(v) The entity meets applicable State 
                        licensure requirements.''.
            (2) Construction.--Nothing in the amendment made by 
        paragraph (1) shall be construed as affecting the authority of 
        the Secretary of Health and Human Services to require State 
        licensure of an entity under the Medicare competitive 
        acquisition program under section 1847 of the Social Security 
        Act (42 U.S.C. 1395w-3) before the date of the enactment of 
        this Act.
    (c) GAO Report on Bid Bond Impact on Small Suppliers.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study that evaluates the effect of the bid 
        surety bond requirement under the amendment made by subsection 
        (a) on the participation of small suppliers in the Medicare 
        DMEPOS competitive acquisition program under section 1847 of 
        the Social Security Act (42 U.S.C. 1395w-3).
            (2) Report.--Not later than 6 months after the date 
        contracts are first awarded subject to such bid surety bond 
        requirement, the Comptroller General shall submit to Congress a 
        report on the study conducted under paragraph (1). Such report 
        shall include recommendations for changes in such requirement 
        in order to ensure robust participation by


              

         legitimate small suppliers in the Medicare DMEPOS competition 
        acquisition program.

            Passed the House of Representatives March 16, 2015.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.

Summary: Medicare DMEPOS Competitive Bidding Improvement Act of 2015 Amends title XVIII (Medicare) of the Social Security Act with respect to the Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition program. Prohibits an entity from submitting a bid for a competitive acquisition area, during calendar 2017-2019, unless it has obtained a bid surety bond of between $50,000 and $100,000 for each such area. Requires the forfeit of any bid bond submitted for a competitive acquisition area if the bidding entity does not accept a contract offered for any product category when its composite bid was at or below the median composite bid rate for all bidding entities included in the calculation of the single payment amounts for the product category and the area. Requires the Secretary of Health and Human Services to collect on the forfeited bond. Requires return of a bid bond within a specified 90-day period to a bidding entity that does not meet such bid forfeiture conditions. Prohibits the Secretary from awarding a contract to any entity that does not meet state licensure requirements. Directs the Government Accountability Office to study the effect of this bid surety bond requirement on the participation of small suppliers in the Medicare DMEPOS competitive acquisition program.