Long time HME provider throws in the towel

Monday, April 25, 2011

Editor's note: The following is the speech that provider Rob Brandt gave at the April 5 meeting of the Program Oversight and Advisory Committee on competitive bidding.

My name is Robert Brant and I am the co-owner of City Medical Services in North Miami Beach, Fla., in the Miami CBA. My business began in 1997 and we were Joint Commission accredited nine years before it was required.

In July, I accepted the contract as a bid winner for oxygen in the Miami CBA, even though I was not awarded contracts in other areas I am experienced and bid in: hospital beds, CPAP and respiratory assist devices, walkers, enteral tube feeding supplies and support surfaces.

Last week I decided to close my business after a call from an oxygen patient, Jean.

Jean requires continuous oxygen and uses an average of six large tanks a week. The previous portable oxygen rate was $28.77 per month for suppliers to provide as many oxygen tanks as the patient needs. I did not bid a penny below that number because I did not want to violate the "Bona Fide Bid" requirement. That is the program's guarantee that bids are not accepted below the manufacturer's cost.

I can't even make one trip to the patient's home, honk my horn and drive away for $28.77, let alone receive the bid rate of $21.66 per month and provide an average of 24 oxygen tanks per month to Jean--and she called to tell me that she needed more tanks.

Over the last few years, because of cuts in reimbursement, cuts in the total number of months paid, new compliance regulations and increased documentation requirements, our annual revenue has dropped from $1 million per year to $600,000 in 2010. 

In preparing for life under competitive bidding, I laid off half of my staff and reduced my physical space. Unable to continue to supply CPAP disposables, enteral feed supplies, diabetic supplies and a $50 cut in monthly oxygen reimbursement, our company will lose $25,000 in revenue per month, a total of $300,000 for 2011. It is impossible for me to operate my business, pay for rent, vehicles, a licensed respiratory therapist and other staff under this model and still take care of Jean and the hundreds of other patients like her.

In order to cut my losses and stop incurring debt, I have decided to close my business, effective April 30th. 

The one flaw in this program that angers me more than any other is the fact that in January, I tried to send over 150 existing CPAP patients to a local bid winner. This bid winner was not one of the many located out of state or hundreds of miles away in Central Florida. This company is located about 10 miles from my office and they refused to provide new CPAP masks to my existing patients. 

They explained to me that they have never provided CPAP devices or supplies before and they were not about to start. The fact that I was not awarded a contract and yet out of state, out of area, inexperienced and financially bankrupt companies were awarded contracts is very difficult to accept and I pray that this program is stopped before more patients and more companies are affected. hme

Rob Brant is co-owner and general manager of City Medical Services, and president of the Accredited Medical Equipment Providers of America.