HME Sherlocks deduce likely sites for competitive bidding

Tuesday, May 31, 2005

CHICAGO -- CMS won't start talking about which 10 cities will be first up for competitive bidding until it issues a notice of proposed rulemaking at the end of this summer, but that doesn't mean the speculation hasn't begun.
Last month, the research firm that's helping CMS develop plans for competitive bidding, the Research Triangle Institute (RTI), held focus groups in Chicago and Dallas to learn more about the possible impact on small suppliers.
Nothing in the CMS announcement suggested that Chicago and Dallas will be among the 10 cities that the government picks for competitive bidding in 2007. But they are among the 10 largest MSAs. By law, CMS must roll out competitive bidding in 10 of the largest MSAs.
In Chicago, the announcement about the focus group locations didn't surprise Maureen Lake, who operates Lake Medical Supply in the Chicago MSA. "I'm pretty sure we'll be affected," she said.
In Dallas, John Cook, president of Performance Home Medical, was as resigned: "I would assume that (Dallas) will be part of the initial competitive bidding roll-out."
And yet, insiders believe CMS has not yet identified its ten cities. "No one at CMS has a preconceived notion," said the insider.
Dennis Trach doesn't believe it. "I think they knew at the beginning," said Trach, a compliance officer at Associated Healthcare in Amherst, N.Y. "They're not going to tell us until the end of August, but this stuff can't be decided in 2-3 months."
Most observers believe CMS will skip Los Angeles and New York during the 2007 roll-out because the cities are too big and unwieldy to stand as pioneers.
Otherwise, the likely locations are not a tough call, said Trach, who has attended the last two meetings of the PAOC (Program Advisory and Oversight Committee). At the last meeting, Trach said a lunchtime pow-wow by a number of informed consultants, suppliers and association people deduced just such a likely list.
For ground rules, they assumed that CMS would avoid picking two MSAs in the same state and that they'd pick their 10 MSAs from among the 30 largest in the country.
Here's the group's list and some skimpy rational for the selection:
San Francisco. Since LA's out, SF's in, although Trach personally thinks San Diego is the more likely city in California since it is in one county, large enough, and would be more manageable for bids.
Seattle. Have to do something in the Pacific Northwest for nation-wide spread.
Phoneix. Lots of Medicare beneficiaries and still growing.
Denver. Just for spread to include a mountain state MSA. Although, Trach would substitute Las Vegas because it is also manageable and the fastest growing city in the US.
Chicago. Have to have a big one in the center of the country; again for the spread and size.
Dallas. The group thought it was a toss-up between Houston and Dallas.
Atlanta. The representative from the southeast.
Miami. More northern and Cuban in character than Southern, and lots of
beneficiaries with potential for savings.
Baltimore/DC. Mid-Atlantic. Because CMS would be able to watch what's happening in its own backyard. Trach suspects this will be one of the first two so processes can be tweaked before export to other sites throughout the year.
Boston. Got to do something in the Northeast, if you are eliminating NYC; also a manageable size. Trach predicted Boston to be the second of the first two due to proximity to CMS for travel and control.