CPAP bids tricky this time around

Thursday, October 22, 2009

No one is happy about having to craft bids for Round 1.2 of national competitive bidding, but for CPAP, where the landscape has changed since last year, providers are even less happy.

New coverage criteria rules, which went into effect Nov. 1, 2008, ramped up compliance requirements. That means more work—and more cost—must be included in CPAP bid amounts.

“How do you work that into an appropriate bid—juggle everything it encompasses, set up the follow-up appointment and pay for more expensive units,” said Patrick Clevidence, vice president of respiratory services for Cleveland-based Medical Service Company. “Then on top if it, make sure the patient gets to the doctor and then get the doctor’s documentation. It’s tough.”

For initial coverage of a CPAP, patients must have a face-to-face evaluation with a physician before the sleep test. Between 61 and 90 days, they must have a follow-up visit and meet certain criteria for continued coverage.

In an effort to prevent low-ball bids this year, bidding rules require that bids not exceed the current fee schedule and that bid amounts must be “bona fide.” That means bid amounts must be backed by a manufacturer’s invoice that proves a product can be provided for the bid amount.

“I have no idea how Medicare is going to calculate a legitimate bid based on that,” said provider Rob Brant, CEO of City Medical Services in North Miami Beach, Fla. “There’s so much extra expense involved. We are not just delivering the device.”

Providers who bid on CPAP this time around will have to carefully consider every aspect of providing the therapy, warns Doug Stallbaumer, president of Argosy Group, a consulting firm.

“If you are just looking at the hard costs of the machine and the cost of the RT’s time, you are going to end up underbidding,” he said. “Assess the amount of time it takes each individual involved with a new patient set-up. That includes the intake person, the insurance verification person and the delivery person. Consider how that fits into the cost, along with overhead.”

Last year, the winning bid amount for CPAP reduced reimbursement, on average, 29%.

“The concern for us is that people will use (last year’s bid) as the high-water mark and go down from there,” said Clevidence. “That’s on top of the 9.5% cut (that took effect in January).”

If this year’s bids are too low, providers won’t be able to invest the needed time to get patients compliant.

“That will defeat Medicare’s goal,” said Tom Fry, owner of Orlando, Fla.-based Sunbelt Medical. “Nobody will be compliant. The machines will go out for three months, then we’ll go out and pick them up.”