Fear forced all of us to bid because we had no alternative

Friday, March 22, 2013

Editor’s note: The following is a letter that provider David Petsch sent to his congressman in the wake of CMS’s announcement of the Round 2 payment amounts.

We know that 867 providers were offered contracts in Round 2, with bid rates much lower than Round 1. The train wreck has occurred and now we only await the death and injury toll. The bid offers at 45% off current rates are not legitimate and cannot be implemented without the entire DME industry collapsing. 

I have talked to attorneys, and they say our industry has no legal remedy against CMS. Are we dealing with a mafia? No one in Georgia that we can find was offered contracts for what they specialize in, and many even larger companies were offered nothing at all. But what difference will it make since the payment amounts are so low to be below cost for most items? Some in Georgia were offered contracts in Tennessee or Florida or Alabama. I have been told foreign-owned companies and mostly out-of-state providers were offered contracts in Georgia. But because they will not announce until April to whom they offered contracts, no one can know. And then these services will be required to be implemented July 1st. 

I was offered three contracts in Atlanta, where I don’t even have a location. We did not bid as low as these prices and not even the largest providers can buy the products as low as they are offering to pay. Most are below cost. This program can now officially be called a farce. We have been saying this for years and until someone dies or the program is eliminated completely, what can we do? 

My decision is to decline the contracts, but I know someone else will sign them—frantic providers that will have to close shop July 1st, or buy themselves some time. And they are praying that something will happen to stop the program. They then will have put themselves in a no-win situation. Close or be sanctioned legally by CMS for failure to provide services and be forever excluded from government services. 

This entire program now has proven what the economists have been telling Congress for years. This program is not a workable business model or bidding system. We have been pushing this awareness for years so what or when is Congress going to do to stop it?

Why don’t all DME providers just say “never mind” and not bid in this program? Fear. Fear forced all of us to bid because we had no alternative. We have begged Congress for years to look at our alternatives, but they continued to allow CMS to move forward. Bid, or you are out of the program for three years. Did someone think any company can go three years without shutting their doors? Fear.

It forced me the same way. I bid so that I would not have been excluded from the program and have to fire 15 people immediately and see my entire family business go down the drain with it. But we had to bid in a flawed system that forced us to commit suicide or be left out, anyway.  

In all due regard and respect, Congress needs to act today. I would be proud to be a part of the solution, if you want, but it is out of my hands and in Congress’ court.

—David and Janice Petsch, owners, Petsch Respiratory Services, Martinez, Ga.