Bid results 'surprise' Scooter Store

Monday, June 30, 2008

Much has been made of the 39 contracts that The Scooter Store won and accepted for Round 1 of national competitive bidding, particularly its near absence in the standard power wheelchair category (It won contracts in only two of the 10 competitive bidding areas). The Scooter Store won the bulk of its contracts in complex power wheelchairs (nine CBAs), negative pressure wound therapy (eight) and oxygen (six). Here’s what CEO Doug Harrison had to say in June about competitive bidding, a program he believes should be as “American as Mom, baseball and apple pie.”

HME News: So were you surprised The Scooter Store won so many complex power wheelchair contracts?

Doug Harrison: I think the results surprised everyone, including us. We did launch Alliance Seating and Mobility (The Scooter Store’s complex rehab division) last year with intentions to see it grow. We were still surprised.

HME: Can you explain what kind of ramp up efforts are taking place to ensure The Scooter Store can adequately provide complex power wheelchairs?

Harrison: Our ramp up will consist of hiring many new ATSs and rehab technicians in all of the CBAs Additionally, we are considering several strategic acquisitions.

HME: Why don’t you think The Scooter Store won more standard power wheelchair contracts?

Harrison: It seems that the companies that are national leaders in each bid category tended to lose most of the bids in that category.

HME: You mentioned strategic acquisitions. Does The Scooter Store plan to acquire contract providers in some of the product categories/CBAs in which it didn’t win bids?

Harrison: Yes, if we can make acquisitions at a reasonable price. Some suppliers that won bids now have overly optimistic expectations about what their businesses and their bids are worth.

HME: Does The Scooter Store plan to subcontract bids for product categories like oxygen?

Harrison: Yes.

HME: Why did the company bid for oxygen?

Harrison: Diversification.

HME: Is The Scooter Store trying to become a full-service provider of DME?

Harrison: The Scooter Store would like to help our customers live safely and confidently at their own home for as long as possible. To fulfill that mission will require the addition of several products and services.

HME: How do you respond to concerns that a provider known for wheelchairs won a bid for oxygen? It was even the topic of discussion at a hearing held by Rep. Pete Stark, D-Calif., a couple of weeks ago.

Harrison: I can only assume that Chairman Stark was reacting to very emotional stories from understandably terrified constituents. GMAC (that’s General Motors-the car guys) is one of the largest financial institutions in the country. I know that our name limits us in the minds of some people, but it doesn’t limit us in our mission to provide freedom and independence to our customers.

HME: Does accreditation make The Scooter Store qualified to provide oxygen, a product category that, up until now, it hasn’t provided?

Harrison: Is accreditation, alone, definitive? Clearly not. However, it certainly seems to be a much better indicator than the name of the business, on which some people have chosen to obsess.

HME: In the past, you’ve mentioned that not everyone thinks competitive bidding is bad. Can you explain?

Harrison: Competitive bidding, as a philosophy, is as American as Mom, baseball, and apple pie. But CMS has built rules into this arbitrary price reduction scheme for DME that make it anything but true competitive bidding.