CB in Texas: 'They don't need to do this'

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Sunday, June 30, 2002

AUSTIN, Texas - Texas Medicaid officials, who released an RFP for competitive bidding May 15, view the reimbursement methodology as a strategy for controlling costs and would like to see it shave $7 million off Texas'$100 million annual budget for durable medical equipment - without decreasing quality.

"I think the important part of competitive bidding is setting the quality bar," said Billy Millwee, Texas Medicaid's manager of administrative contracts. "We aren't just looking for the cheapest price, but given these quality standards, what is your price."

Despite Texas Medicaid's effort to work "smart and reduce costs and not affect patient care," the state has not turned a deaf ear to the HME community. Texas originally set June 5 as the deadline for submitting an RFP but extended that to July 5 following an industry request for additional time. "If the vendors say, 'We can't do this in this amount of time,'then we have to rethink our timeline because we've got to have a vendor," Millwee said.

Desperate to reduce healthcare spending, Texas is the third state this year - following Florida and North Carolina - to announce intentions to implement competitive bidding for Medicaid. And like providers in Florida and North Carolina, Texas HMEs claim it will decrease patient choice, reduce the quality of services and equipment as the winners move to reduce costs, and stake out exclusive geographic territories for the winners.

If all goes according to plan, Texas wants to award final bids Sept. 20 and begin contract operations Nov. 1. For providers who've worked years providing "low margin" Medicaid services to the state's most needy, the quick switch to bidding feels like a "big slap in the face," said Terry Hull, owner of Terry Respiratory Care Services in Houston.

"It is not fair," he said. "But if it is inevitable, which I do believe it is, give us time to submit alternatives. Every day I feel like I'm an advocate for the state and live by the rules and meet the needs of the clients. Do we make a lot of money, absolutely not."

Glynda Turner, executive director of the Medical Equipment Suppliers Association (MESA), which includes Texas, said she "remains hopeful" the organization can work with the state and develop an alternative to competitive bidding. She said the group's considering "every idea that you've ever heard about" but didn't want to comment further until MESA develops a plan.

Kathleen Weir Vale, president of Hope Medical Supply in San Antonio, said there are simpler ways to reduce spending. For starters, try cutting down on fraud and abuse by raising the standards providers must meet.

"They don't'need to do this," Vale said. "All they need is good, honest competitive providers." HME

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