New competitive bidding study: 'Things are not all fine and dandy'

Tuesday, November 23, 2010

ELYRIA, Ohio - A new analysis of Medicare's competitive bidding program paints a bleak picture of the winning bidders and raises concerns that many may not be qualified or have the financial resources to adequately serve beneficiaries.

"We'll be hitting the Hill heavily next week with this information," said Cara Bachenheimer, Invacare's senior vice president of government relations. "We think it's important for members of Congress to see the full picture. All they hear is CMS's side and the fact of the matter is that things are not all fine and dandy."

As soon as CMS announced the winning bidders Nov. 3, Invacare began analyzing them. While the results are still preliminary, Bachenheimer said she's "comfortable" saying that 40% of the winners fall into one or more of the following categories: they have credit limits of less than $10,000; they are on credit hold; they have no homecare account with Invacare; or they are so far behind on their payments that their accounts have been turned over to collections.

"We are the largest (HME) manufacturer, and if we haven't heard of them or they don't have an account with us, some of them are new companies spun out of nowhere, and that doesn't bode well for financial viability," she said.

That many of the winners appear to be weak financially comes as no great surprise. During the aborted Round 1 bid in 2008, CMS required three years of financial documents. For the rebid, CMS required only one year's worth. That makes it much easier for a new company or shaky company to fudge the facts to make themselves look better than they really are, Bachenheimer said.

The question now is this: Will this information help the industry in its fight to delay or eliminate competitive bidding?

"It's a huge uphill battle," Bachenheimer said. "CMS has dug their heels in. But never say never. The fat lady hasn't sung."