Bundling would complicate, not simplify, bidding, providers say

Friday, March 7, 2014

BALTIMORE – The costs for providing enteral nutrition fluctuate so wildly, that bidding the product category as a bundled service would be a stab in the dark, say providers.

“The more complicated the bid, the more unrealistic the price,” said Jeff Rose, vice president at Health System Services in Niagara Falls, N.Y.

In an advance notice of proposed rulemaking published Feb. 24, CMS said it was seeking comments on whether it should simplify payment rules under competitive bidding for enteral nutrition by creating one monthly payment to include all equipment, supplies and service.

But providers say there are simply too many variables when it comes to providing enteral nutrition. For example, some patients receive nutrition through a pump while others are bolus fed; some enteral formulas may cost twice that of others; and patients may not use the same amount of formula from month to month.

“How do you factor all that in?” said Rose. “You could try to average it all out, but it would be difficult to bid based on an average. You are probably going to lose money on the more expensive items and make it up on the less expensive items, but what if all of a sudden you only get orders for more costly products?”

Rose says if CMS opts to go the single payment route, it would make more sense to establish four to six separate bid rates to try and factor in some of the largest differences.

But Adrian Ioja suspects that many providers will simply choose not to provide more expensive products. With an average reimbursement cut of 41% for enteral products in Round 2, there’s not a lot of wiggle room, he says.

“There’s no margin to say, ‘I’ll take a loss on that guy,’” said Ioja, general manager of at Huntington, Calif.-based Diversified Medical Equipment and Supplies. “Medicare is creating a negative impact on beneficiaries who will have to pay for it out of pocket.”