Competitive bidding: 'Everybody's in panic mode'

Friday, February 15, 2013

WASHINGTON – Although it’s too soon to gauge how many providers accepted initial contracts for Round 2 of competitive bidding, stakeholders say it’s likely that those who did, did so out of fear.

“I am hearing a lot of people saying, ‘There’s no way I can do this,’ but I think a lot of ‘no’s’ turn into ‘yesses,’” said John Gallagher, vice president of government relations for the VGM Group. “They are accepting out of fear, but I understand. If you’ve got a contract in hand, what are you going to do?”

The deadline for accepting contracts was Feb. 12. CMS announced the Round 2 payments, with an average cut of 45%, on Jan. 30.

While it’s understandable that providers felt they had no choice but to accept contracts, it certainly doesn’t help make the industry’s case against the program, say stakeholders.

“The question being asked of us is, ‘You guys bid and set the prices, what’s the problem?’” said Wayne Stanfield, president and CEO of NAIMES. “How do you combat that, when people not only bid low, but they are signing contracts with these ridiculous fees?”

NAIMES has posted an informal, anonymous survey to see how many contracts have been accepted.

Still, the industry should take heart that a growing clamor from providers and beneficiaries is catching the attention of lawmakers, say stakeholders.

“I am getting calls from the Hill asking us for meetings about (Round 2 pricing),” said Jay Witter, senior director of government affairs for AAHomecare. “That’s a change. The announcement was the catalyst; everybody’s in panic mode. I don’t see that slowing down.”

AAHomecare and others continue to work with Rep. Tom Price, R.-Ga., on the market-pricing program (MPP), which Price has agreed to reintroduce. A big hurdle: It calls for Round 2 payments to remain in place until MPP can be implemented.

“The cut has thrown a wrench, but as much as people don’t want to hear it, the political reality is if we don’t have a budget neutral package, there’s no legislative opportunity,” said Cara Bachenheimer, senior vice president of government relations for Invacare.

One thing all stakeholders agree on: Everyone needs to keep up the pressure. Lawmakers are back in their home districts the week of Feb. 18, a good opportunity for providers to meet face-to-face with their members and educate them about competitive bidding. Next week, lobbying events are planned, including a Washington Fly-In Feb. 26 and 27, which will coincide with a Virtual Fly-In: Shutdown the Switchboard, coordinated by NAIMES and The VGM Group. For more information call 877-4dmehelp or visit


It is very sad. So many suppliers who do a good job and follow the rules will be forced to go retail or out of business.

There is no way as an independent pharmacy/medical supply company we can provide a good diabetic strip for $10.46 a bottle of 50.

What about someone who is testing 7x a day because they have a kidney transplant? Do they trust a product that cost that amount of money to take care of their diabetes?

Is CMS going to brag about the deaths and the poor quality of care these people will recieve now as much as they do the amount of money they are saving?

How about we get people who know the product in a place they can help? When my grandmother was in the hospital her Medicare was billed $173.00 for a regular walker with wheels when they probably pay $30.00 for the walker. The fee schedule is $121.00.

How about someone who has been working in the field for years and with different distribution companies that may know a bit more about the cost of products?

I feel so bad for the people who truly need these products and won't be able to get them anymore. They will have to decide wether to eat or buy the product.


Rose Johnson

Able Care Pharmacy & Medical Supplies

15 Palomba Drive Suite 8

Enfield, CT 06082


According to the NAIMES website, their informal survey indicates that a huge percentage of those offered contracts intend to accept them.  If this proves to be the case, the HME industry will have absolutely 0 leverage with Congress in trying to avert this catastrophe.  It would virtually guarantee that the program will begin on time, with all of the assorted disasters that have been predicted.