Florida: Bid comes with hefty price tag

Friday, February 24, 2012

TALLAHASSEE, Fla. - The latest plan to competitively bid incontinence supplies here stacks the deck against small providers, stakeholders say.

The state on Dec. 29 issued an invitation to negotiate (ITN) for a single source provider for certain Medicaid patients. Several components of the proposal, including a requirement that bidders have a physician on staff, and a requirement that they post a $7 million bond, create serious barriers to entry, said Sean Schwinghammer, executive director of the Florida Alliance of Home Care Services. 

"These requirements are just odd--they don't have anything to do with the delivery of services, and they are not currently part of Medicaid standards," he said.

The bond is especially troublesome, said Schwinghammer. Even with the highest bond rating--1%--providers would have to put up about $70,000, without any guarantee that they'd win the contract. That, combined with other expenses associated with bidding, means providers could be out of pocket as much as $100,000, he said.

"The question many companies have is, 'Do I apply and throw away that money when I know I am not going to win?'" said Schwinghammer.

Unlike previous proposals, this latest would apply only to beneficiaries ages 4 to 21, he said.

"It's still a big group, and it's a very needy class of patients," said Schwinghammer.

This isn't a new issue for providers here. Most recently, in 2011, providers scored a victory when Gov. Rick Scott declared a similar proposal, included in the state's 2011-2012 budget, "unconstitutional." 

The problem, say providers, is that large out-of-state providers want to muscle in on Florida Medicaid.

"There's a company that has a lobbyist that keeps on asking for the same thing," said Fino Randazzo, president and owner of Orlando-based Florida Home Health Equipment and Supplies. "He pushes the right buttons and it gets thrown in there. If it was such a great idea, it would have happened five years ago."