Bidding bungle: If you're not participating, 'how are you going to stay alive?'

Sunday, October 21, 2007

WASHINGTON - After reading several reports on how few bids industry sources suspect CMS received for national competitive bidding, providers couldn't talk about much else.

"If you're like most providers and you rely on Medicare for 40% to 60% of your business, you'd have to be clueless or getting out of the industry entirely not to submit a bid," said Jody Wright, president of Rocky Mountain Medical Equipment in Englewood, Colo., and president of the Colorado Association of Medical Equipment Services (CAMES). "I'd like to ask them: How are you going to stay alive?"

CMS has kept its lips sealed on how many bids it has received, even at an Oct. 11 meeting of its Program Advisory Oversight Committee (PAOC). Industry sources suspect, however, that 1,500 to 2,000 providers in the first 10 competitive bidding areas (CBAs) submitted bids, far fewer than the 15,000 or 16,000 CMS expected.

Wright may have been half-joking when he mentioned "clueless" providers, but several sources blamed the scarcity of bids on CMS's lackluster job of educating providers and an online bidding system fraught with technical glitches.

"It could have a lot to do with the lack of understanding and difficulty submitting bids," said Walt Gorski, AAHomecare's vice president of government affairs. "By comparison, there isn't an individual in the United States who didn't know about the prescription drug benefit. We know CMS has the resources and tools; they're just not applying them."

Provider Gary Sheehan believes, like Wright, that some providers didn't submit bids because they plan on leaving the industry.

"Some providers have decided they have no desire to compete in this type of environment," said Sheehan, general manager for Cape Medical Supply in Sandwich, Mass. "Who can blame them? Unless you're at a certain level, this big a cut and this many changes make you think your time and energy may be better spent elsewhere."

Several sources theorized that CMS has a smaller pool of providers to pick from than it thinks. They suspect some providers with Medicare numbers don't provide enough home medical equipment to make participating in competitive bidding worthwhile.

Provider Gary Miller believes some providers may have not been prepared to expand their operations to serve, in the case of diabetic supplies, for example, all 10 CBAs.

"A diabetic testing company may have to go from providing test strips for one state to 10 CBAs," said Miller, manager of Mt. Carmel Medical Equipment in Pittsburgh, Kan. "Can they ramp up operations in time?"

Other sources theorize providers believe competitive bidding will just go away.

Whatever the reason for the scarcity of bids, AAHomecare's "concerned," Gorski said.

"Whether it's competitive bidding or the issues with oxygen and wheelchairs, it seems like Congress is inadvertently dismantling the DME benefit," he said. "By the time we have true data that shows the effect (of these changes), it will be difficult to correct the situation."