Iowa: Latest state to eye competitive bidding

DES MOINES, Iowa - The Medicaid program in Iowa continues to pull punches.

Providers in the state barely had time to adjust to a recent 5% reimbursement cut for HME when a report was released that proposes competitively bidding HME and supplies. It's now up to state lawmakers to implement the program or not.

“We're doing a tremendous amount of education,” said Terry Flatt, Iowa state chairman for the Midwest Association for Medical Equipment Services (MAMES) and executive vice president of Hammer Medical Supply in Des Moines. “What we're finding is that no one knows what we do until we talk to them. So our biggest fear is that they don't understand the complexity of our industry.”

Gov. Chet Culver's “Iowa Efficiency Review Report,” released earlier this month, states that competitively bidding HME and supplies could save $500,000 in the first year and $4.1 million over five years—a tempting option for a state that, like most others, is cash-strapped.

Providers, with support from MAMES and The VGM Group, which is based in Waterloo, are educating lawmakers about the potential negative impacts of competitive bidding on their constituents, including reduced access and service.

“It's one thing to competitively bid adult diapers that are being used in state institutions,” Flatt said. “But you can't wholesale what we do. Only half of what we do is providing product; the other half is all service.”

Providers in Pennsylvania used a similar strategy in 2007 to beat back a proposal in that state to competitively bid HME.

“You have to be able to gauge the impact of the program and communicate that to legislators,” said John Shirvinsky, executive director of the Pennsylvania Association of Medical Equipment Suppliers (PAMS). “You also need some legislative champions.”

Providers in Iowa hope they have that in Sen. Jack Hatch, who's involved in three committees that will review the governor's proposal. He has committed to meeting with them.

“They're not opposed to alternatives,” Flatt said. “They're looking for advice on other things they can do, like a reduction in the fee schedule for one or two items.”

Even if providers in Iowa escape this threat, they need to remain vigilant, especially with all eyes on Medicare's national competitive bidding program for HME, which goes live Jan. 1, 2011.

“When they agreed to withdraw the proposal in Pennsylvania, they said they wanted to wait and see what happened nationally,” Shirvinsky said. “We're always watching it.”