Careful where you cut, MESA warns

AUSTIN, Texas - The Medical Equipment Suppliers Association has enlisted providers in Texas to write their legislators about the dangers of implementing competitive bidding for Medicaid. Late last year, the state circulated a 23-page document that proposed implementing competitive bidding to reduce costs for DME and supplies. It pointed to a CMS demonstration project in San Antonio that reduced costs for certain DME by $4.6 million from 2002 to 2004. If the state implements competitive bidding, MESA agrees it will reduce costs--but at the expense of providers, especially small providers, and the patients they serve. "If a provider isn't big enough to buy products in significant quantity, how are they supposed to stay in business?" said Liz Moran, MESA's executive vice president. "If that provider's out of the game, where does that leave their patients, especially those in rural areas and those who don't have transportation?" MESA's first goal is to prevent the state from implementing competitive bidding at all. If that fails, it plans to push legislators to pass an "any willing provider" provision that would allow any provider to supply DME if it agrees to do so at the competitive bidding price. Knowing that the state spent about $249 million for DME and supplies in fiscal year 2005, MESA acknowledges that legislators are primed to reduce costs this year. The state's telling them competitive bidding could do that--to the tune of $1.5 million to $19.9 million. MESA has a different message for legislators, Moran said. "We understand that Medicaid is expensive, and the state needs to cut corners somewhere," she said. "But they need to be thoughtful about what corners they cut and who gets hurt."