More competitive bidding: Hospital exception frustrates providers

Thursday, September 30, 2010

WASHINGTON - A provision tucked away in the Medicare Improvements for Patients and Providers Act (MIPPA) that makes an exception for hospitals from competitive bidding came back to haunt HME providers recently.

CMS released an MLN Matters article on Sept. 21 that stated hospitals, whether or not they have been awarded a competitive bidding contract, will be able to furnish walkers and "related accessories" to their patients when the program kicks off Jan. 1, 2011.

Even though the provision is not new--MIPPA was passed in 2008 and the recent MLN Matters article was a minor revision of a previous article--it continues to frustrate providers, especially those in competitive bidding areas (CBAs).

"I don't think it's right," said Gary Sheehan, president and CEO of Cape Medical Supply, which just expanded its reach into the greater Boston area, a Round 2 CBA. "It's either good policy or bad policy, and everyone should be held to it or nobody should be held to it."

Congress included the provision in MIPPA to help hospitals prevent delays in patient discharges.

That's all well and good, says healthcare attorney Jeff Baird, but the provision could put providers in CBAs at a disadvantage.

"In competitive bidding, the supplier has to make up for the lack of profit margin with volume and this, potentially, cuts down on that volume," said Baird, of Brown & Fortunato. "It just makes thing more difficult for the suppliers in the CBAs who are just trying to survive."

Additionally, there are numerous questions surrounding the provision. One provider e-mailed HME News, wondering whether it would be expanded to other products often needed upon discharge like crutches, canes, folding manual wheelchairs, blood glucose monitors and infusion pumps, and whether it means hospitals must meet the same requirements and standards as providers to furnish the equipment.

"As is often the case, we need more flesh on the proverbial bone," said healthcare attorney Elizabeth Hogue.

A small concession, providers say, is it that the exception doesn't apply to hospital-owned DME companies. But even that's of little comfort.

"Hospitals could still game the system pretty easily," Sheehan said. "If a hospital owns a DME company, the hospital could do all of the walkers and the DME company could stop doing them. They're still going to be able to generate the revenue without having to deal with this horrible program."

Read the MLN Matters article at: