Extended bid contracts? ‘Either way you lose’

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Friday, May 18, 2018

YARMOUTH, Maine – If CMS decides to extend current competitive bidding contracts, a slight majority (53%) of respondents to a recent HME Newspoll say they would accept them—reluctantly.

“We currently have the contract and have provided the equipment and services, so it just makes sense to continue with it,” said one respondent to a recent HME Newspoll. “Either way, you lose.”

Contracts for both competitive bidding and the national mail-order contract for diabetes are set to expire Dec. 31, 2018, and 81% of poll respondents say there’s no longer enough time to complete the bid process by Jan. 1, 2019.

While CMS has the authority to extend contracts, several rounds of the flawed program have driven reimbursement rates to unsustainable levels, making the contracts extremely unattractive, say respondents.

“We would decline the offer because with all the cuts that have been made it is a big loser,” said Melody Amos, office manager at Quality Tem in Bakersfield, Calif. “You’re lucky if you can make your cost back and just break even.”

Other contract suppliers say they are committed to the bidding program for better or worse.

“We have invested a tremendous amount of resources to service many thousands of patients under the bid program,” said Robin Soblick, president of Michigan-based Specialty Medical and Texas-based AJT Diabetic, which hold national-mail order contracts for diabetes testing supplies. “It has taken years to develop an infrastructure capable of economically assisting patients under the bid program.”

With approximately 40% of suppliers closing their doors in just the past few years, access has become an issue. Some contract suppliers see extending their contracts as their moral duty.

“Accepting the extension would ensure timely and safe discharges from the hospital campuses in the community,” said one poll respondent. “Declining could increase length of stays and create unsafe conditions if access to equipment is decreased.”

Lack of access is, indeed, a concern—and an expensive one, says another respondent, a hospital-based provider that would also extend their contract.

“Independent suppliers take days if not weeks to deliver, which greatly increases our readmission rate,” said the respondent. “Those readmissions are a much greater cost overall to our system then the horrible reimbursement.”