CMS's modus operandi: One national supply bid

Friday, February 29, 2008

BALTIMORE - CMS excluded mail-order diabetes from round two of competitive bidding, a move that surprised few industry watchers for one good reason: Most expect the agency to create a national bid category for the supplies.
Creating a mail-order category in the first place indicated that CMS desired a single bid for one of its largest utilization areas, says Seth Lundy, a partner with Washington-based law firm Fulbright & Jaworski.
While CMS is currently only singling out diabetes supplies for mail order, the industry shouldn't be complacent, Lundy said. Oxygen and wheelchairs might not be suitable for mailing but inhalation drugs, enteral nutrition and urological supplies are, he said.
Mark Gielniak, vice president of Diabetes Plus in Warren, Mich., estimates one-third of his business is through mail order. While he has dodged being in the first 80 competitive bid areas, he is looking ahead.
"I'm already accredited," said Gielniak. "Over the next two years, I can keep track of controlling my costs. I am always looking at efficiency and looking for lower cost, good products."
Frank Suess, president of Pharma Supply in Wellington, Fla., does primarily mail order. He put in bids during the first round, but he doesn't think forcing mail order on beneficiaries is fair.
"How legal is it that patients don't have a choice in 10 areas," said Seuss. "Competitive bidding is a bad idea for the industry and for patients, who have no more choice."
CMS estimates that 60% of diabetes supplies are currently sold through mail order, and the lower co-pays beneficiaries are expected to get through NCB should push more to obtain their supplies that way.