Competitive bidding: If offered contracts, most providers would just say 'no'

Thursday, July 15, 2010

YARMOUTH, Maine - Somewhere out there are HME providers who bid low enough to drag down Medicare reimbursement by 32% on average, but when push comes to shove, most providers say they wouldn't accept such a contract.

In the August HME NewsPoll, a whopping 86% of respondents, 336, would say, "no thanks."

"I absolutely would deny the contract," said Bruce Sandler, CEO/President of Wishing U Well Medical in Granada Hills, Calif. "We're struggling at the current rates and a deep cut like that would cut our throats."

Bid cuts across the nine product categories included in Round 1.2 of national competitive bidding range from a 14% reduction for complex power wheelchairs to 56% for mail order diabetes supplies.

"The diabetic supply numbers are so low as to invite bankruptcy," said one respondent. "At this level, we'll just watch those who won try to eke out a living."

Other poll respondents offered some "tough love."

"If you want to stay in business, you will accept and learn to adjust," said one.

For those who say they would accept a contract under the new rates, well, things would change and not for the better, they say.

"Cheap, cheap equipment and no service," said Sandra Hoskin, President/CEO of Houston-based American Medical Equipment Co. "If it breaks, the beneficiary will have to bring it in."

Indeed, while the cuts are painful for providers, it's the patients who will bear the brunt of reduced services, say providers.

"For heavy items like hospital beds, we will only deliver on certain days of the week," said one provider. "This would mean a patient who needs a hospital bed and should be discharged on Monday will have to wait until Thursday, when we are in his area."

Other providers--including some who won contract--say if you bid sensibly, you can make it work.

"We made a competitive bid, and won CPAP bids in four MSAs," said Richard Webb, of Monitor Medical. "We look to grow our business and expand our patient basis."

It seems providers are damned if they do, and damned if they don't, they say.

"If our choice is to accept a 32% cut or be left standing on the sidelines, I'd have to accept," said one provider. "A 32% cut is enormous, but losing 100% of Medicare (70%) of my overall business is worse."