Bidding in Riverside: ‘It’s dirty’

Saturday, May 31, 2008

RIVERSIDE, Calif.--Officials at Pride Mobility Products and several legislators have demanded that the Department of Health and Human Services begin an immediate investigation into suspicious bids and relationships in the Riverside, Calif., competitive bidding area (CBA).

In a May 1 letter, Pride Chairman and CEO Scott Meuser notified Secretary Michael Leavitt that “18 of the winning standard power wheelchair category bidders had all of the following in common: price, manufacturer and consultant.” These bidders submitted prices that were as much as 70% lower than the current Medicare fee schedule.

“What all the stakeholders in the industry have been working to do is show that competitive bidding is a flawed process, and this is one of the most significant flaws we’ve found,” said Kirsten Delay, Pride’s senior vice president of sales management and operational planning.

Providers in Riverside echoed Pride’s findings. They spoke of a group of providers working with one consultant and one manufacturer (not one of the well-known industry names) to set prices.

“It’s really dirty,” said a provider in San Diego.

A provider in Riverside described one of the winning bidders as “a man with a single office with no rehab department or warehouse, just a storefront.”

The accusations against the winning bidders in Riverside raise anti-trust issues, industry sources say, but it’s not that black and white.

“It is unclear whether we have a consultant who simply came up with the same information based on similar factors or whether there was an active interaction among the suppliers who won the bid,” said industry attorney Neil Caesar.

Pride officials said they now plan to look for potential impropriety in other CBAs.

“Riverside is simply the first area where we’ve done a detailed investigation,” said Pride’s Seth Johnson, vice president of government affairs.