Bid pricing could force hands of providers in rural areas

‘I’m already the last person standing’
Friday, July 25, 2014

YARMOUTH, Maine – If Medicare moves forward with plans to apply competitive bidding prices in remote areas of the country, providers there say they will have no choice but to stop accepting Medicare.

“We have already come to the decision that if those numbers are put on us, we will stop taking Medicare,” said Paul Gammie, owner of Gammie Home Care, which has locations on the islands of Maui and Kauai in Hawaii. “We are already the last person standing on the island of Maui that’s full-service DME.”

CMS in July announced plans to apply competitive bidding prices in non-bid areas in 2016 by using regional prices limited by a national ceiling (110% of the average of regional prices) and floor (90% of the average of regional prices).

When you consider the 45% cut, on average, implemented as part of Round 2, that makes the cost of doing business with Medicare simply too high, say providers.

“With the current rates, that extra 10% would just mean a slower death for providers,” said Greg Lord, director of Great Plains Rehabilitation Services in Bismarck, N.D. “Providers are barely making it on Medicare as it is, and any reduction is problematic.”

It’s even worse outside the contiguous U.S., say providers based there.

“The sheer cost of doing business in Alaska is 30% higher than in the lower 48,” said James McComas, CEO of Procare Home Medical in Fairbanks, Alaska. “Under no circumstances would this be workable for Alaska.”

McComas estimates there are currently about eight traditional DME providers in Alaska. If the example of Honolulu, a Round 2 CBA, is anything to go by, the impact of fewer local providers on beneficiary access could be disastrous. In May, CMS had to award two additional contracts to local providers because so many contracts went to out-of-state providers that patients faced long wait times for equipment.

Adding insult to injury: Providers in rural areas won’t see a volume increase as a result of competitive bidding, they say.

“We are already serving everybody,” said Gammie. “So we are not going to get any additional business when they drive these numbers down.”


Why did you choose this business if you don't care about the people you serve?

Every day there are more people needing oxygen. Will you just leave them without it?