Let the bidding begin

Sunday, April 8, 2007

BALTIMORE - It finally happened. Thirty-nine months after President Bush signed a bill that included national competitive bidding for durable medical equipment--39 months that included various states of provider denial, hand ringing and a vigorous effort by HME leaders to soften the dreaded reimbursement cut--CMS released a final rule April 2.

For providers, at least those who expected all along that competitive bidding would become reality, resignation reigned in the wake of the release.

"The feeling is that the train is going down the track and there is nothing we can do," said industry attorney Jeff Baird. "I'm seeing companies that are busting their tails to make a good bid and be awarded the contract. I'm also seeing these exact same companies begin to prepare a fall-back strategy in case they are not awarded the bid."

If all goes as intended, CMS will begin the bidding process later this month in 10 metropolitan statistical areas, select the winning bidders by early December and implement the new fee schedule in those MSAs in April 2008.

The first 10 MSAs are:

Charlotte-Gastonia-Concord, N.C.-S.C.
Cincinnati-Middletown, Ohio-Ky.-Ind.
Cleveland-Elyria-Mentor, Ohio
Dallas-Fort Worth-Arlington, Texas
Kansas City, Kan-Mo.
Miami-Fort Lauderdale-Miami Beach, Fla.
Riverside-San Bernadino-Ontario, Calif.
Orlando-Kissimmee, Fla.
Pittsburgh, Pa.
San Juan-Caguas-Guaynabo, Puerto Rico

The products to be bid on are:

Oxygen equipment and supplies
Respiratory assist devices and CPAPs
Power mobility devices (standard and complex)
Diabetic supplies (mail order only)
Enteral nutrition
Hospital beds and accessories
Walkers and related accessories
Negative pressure wound therapy devices
Support surfaces (in Miami, San Juan only)

When fully implemented by 2010, CMS expects competitive bidding to save Medicare $1 billion a year. AAHomecare Chairman Tom Ryan called that estimate "optimistic" given all the reimbursement cuts DME has endured over the past few years.

"They are working with five-year-old data, and the savings they are touting are just not there anymore," Ryan said. "At the end of the day, I think the ultimate goal is to have fewer providers out there."

Industry consultant Wallace Weeks considers the April 2008 timeframe good news for providers, especially those who have not yet begun to streamline their companies to offset the reimbursement cut.

"The (bill) was signed on Dec. 3, 2003, but you know, there are people who didn't believe that it was going to happen, and probably some still don't," Weeks said.

Raul Lopez, president of the Florida Association of Medical Equipment Services (FAMES), said those unprepared providers "will be in for a rude awakening in the next two months."

"I think they are going to be the ones who have the most questions and the most difficult time," said Lopez, who is also director of operations for Bayshore Dura Medical in Miami Lakes, Fla. "I think everyone else has been either preparing themselves for accreditation or moving forward and trying to streamline their operations."

Chris Rice, director of marketing for Diamond Respiratory Care in Riverside, Calif., said his company has done just that. Over the past year, Diamond "bit the bullet" and became accredited, a requirement for participating in the program. The company also boosted driver efficiency by implementing a GPS system and invested in online education for employees.

Rice called competitive bidding "disappointing." Nevertheless: "It is like anything else--there's a new Medicare change every year. It's a new issue to deal with."