NCB: Be ready, consultant says

Sunday, February 18, 2007

ALEXANDRIA, Va. - If the number of questions asked during AAHomecare's Feb. 15 teleconference on national competitive bidding is any indication, providers aren't ready to talk about the nitty-gritty of how to participate in the program, scheduled to kick off later this year.

Only one of 50-plus listeners asked a question during "Ready or Not, Here it Comes--Competitive Bidding is Just Round the Corner." The teleconference comprised a nearly 90-minute presentation by consultant Miriam Lieber and a brief question-and-answer period. Lieber, president of Miriam Lieber Consulting, spent the bulk of her time discussing what providers should know about their businesses before placing bids.

Lieber conceded that it has been hard for providers to prepare for NCB due to the lack of information about the program. At the time of the teleconference, for example, CMS still hadn't revealed the 10 metropolitan statistical areas (MSAs) where it plans to hold the program and the product categories it plans to put out to bid.

Part of Lieber's presentation involved outlining what has been released (several forms, including application, bidding sheet, quarterly report and beneficiary survey) and what hasn't.

Regardless, it behooves providers to begin taking an in-depth look at their businesses, Lieber said.

"If you decide you don't even want to embark upon (competitive bidding), because it's not something you're interested in doing or you're going to veer away from Medicare--all the more reason why you need to look at internal operations," she said. "If you decide you want to sell, why not make your company as good looking as any other company out there? This is the time to do it."

According to Lieber, before placing bids, providers should know revenue from Medicare and other payers by product category (gross and net), and collections from Medicare and other payers per product category. They'll also want to compare revenue to collections.

"It sounds like review, (but) need to be able to spit it out," she said.

Before placing bids, providers should also consider the costs of participating in the program. On top of the costs of doing business (rent, insurance, billing, etc.), providers should incorporate these costs into their bids: the time it will take to evaluate and prepare a bid ($2,125, according to CMS), a profit margin and cost-of-living increases for employees.

Lieber also discussed how providers can pinch pennies, knowing that, under competitive bidding, they'll have to do more work for less money. Think getting the most out of your intake staff, collecting co-pays upfront and incorporating technologies like document imaging.

The teleconference ended with the sole question of the afternoon: "I believe you mentioned that CMS is awarding three-year contracts. Does that mean we have to rebid on each category every year or is that one price good for three years?"

"It's a three-year contract, so it'll be good for three years," Lieber said.