Grandfathering comes to a screeching halt

YARMOUTH, Maine - Another competitive bidding-related milestone came and went early this year, and it had varying impact on home medical equipment providers in Round 1 areas, but none of them were pleasant.

When competitive bidding went into effect in January 2011, non-contract providers had the option of grandfathering their existing patients for certain home medical equipment for a certain period of time. January of 2012, however, meant the end of many of those arrangements.

Rob Brant, founder of Accredited Medical Equipment Providers (AMEPA), says the end of this last stream of revenue from Medicare forced some non-contract providers to close their doors, including one provider in Fort Lauderdale, Fla.

“I think it was a case where they had downsized—they had let go of some of their staff, they had moved to a smaller facility—and that was it,” he said. “There were finally giving up at that point.”

Most frequently, non-contract providers grandfathered for equipment like hospital beds and oxygen concentrators. Industry sources suspect that non-contract providers in Round 2 will have the same opportunity.

Provider Gerald Sloan opted to grandfather for beds. He says he felt the pain of competitive bidding way before the end of grandfathering.

“We felt it from the first month,” said Sloan, owner and president of Progressive Medical Equipment in Lenexa, Kan. “Sure, grandfathering softened the pain, because we didn't lose all of that business at once. At the same time, we stopped getting new business right away.”

Provider Carl Wallman is on the flip side of the coin: He's a contract supplier for oxygen concentrators and since grandfathering has come to an end, he's received a handful of calls to pick up patients who can no longer get service from non-contract providers. But that's not necessarily a good thing, because these patients are likely past the 36-month cap and won't be eligible for reimbursement again for up to two years.

“We haven't taken them, but it's not too much of a problem because we have Lincare in our area,” said Wallman, president of Galaxy Medical in Fort Lauderdale, Fla. “They seem to take these patients, even though they've already capped, with the promise that they'll get new business in X months.”