Northwood breaks from the pack

Monday, March 31, 2003

CENTER LINE, Mich. - The Northwood, Inc. provider network struck an industry nerve last month when it began lobbying Congress to craft any future competitive bidding program after “successful network models.”

The initiative breaks with what has been the industry’s unified voice on competitive bidding: No how. No way. End of discussion. Some say Northwood’s position could give much needed ammo to the dwindling number of competitive bidding supporters on Capitol Hill.

“It takes you back a little bit,” said Dave Williams, Invacare’s director of governmental affairs. “I thought people were going to sit back and see if we can kill this and not come out with an action like that.”

The Northwood position paper - developed in-house and distributed to CMS and legislators - took almost everyone by surprise. It states that any national competitive bidding program should incorporate “successful network models” that have provided savings in the private sector.

Northwood doesn’t like competitive bidding but views it as inevitable, said Northwood President Ken Fasse. The group issued its position paper to be proactive and to look out for the best interests of its estimated 2,000 independent provider members, he added.

While a number of those members have gone ballistic over the network’s position, calling it self serving, Steve Serra isn’t one of them.

“I feel competitive bidding is an issue that is not going away, and the network model does work,” said Serra, vice president of Healthcor in Southfield, Mich. “I’d feel better working with Northwood than going it alone.”

Northwood and its members, many of them clustered in and around Michigan, have worked in a very competitive environment for years, competing for large contracts with General Motors and other big companies. “We feel prepared for it when it comes,” said Serra.

Until now, AAHomecare, to which Northwood belongs, has spearheaded the industry’s fight and engineered a strategy that presents a single industry voice in the battle to turn back calls for competitive bidding. Adding another position to the mix, especially from a large provider group, weakens that unified-voice strategy, said MED Group CEO David Miller and others.

“Every company is entitled to its position,” added AAHomecare CEO Tom Connaughton. “I’ve been urging the industry to be as consistent as possible to avoid confusion.”

“We’re trying to be realists,” Fasse explained. “We don’t want Congress to mandate competitive bidding, but we know they are going to. What we are trying to do is position our network of providers to compete and stay in business.”

Northwood is not the only industry voice to view competitive bidding as inevitable. Last fall, right after the Republicans seized control of the Senate and House, a number of industry types expected competitive bidding to pass. Some suggested that HME leadership help craft a policy that would be acceptable to providers and beneficiaries. Unlike Northwood, however, they didn’t take their suggestions to Congress and CMS.

In early March, Northwood sent a lobbyist to Washington with a now infamous position paper “urging Congress to mandate competitive bidding for DME, and develop a competitive bidding model based upon successful private sector models.”

Fasse called that version an embarrassing mistake. In trying to represent Northwood’s position on one sheet of paper, the lobbyist incorrectly edited an unfinished draft of Northwood’s proposal. As a result, it looked like Northwood supported competitive bidding, which is not the case, Fasse said.

Northwood meant to say, and what its final position paper states, is that if Congress passes national competitive bidding, “Northwood strongly urges Congress to ensure that a competitive bidding program be based upon private sector models.” A model that will ensure as may independent providers as possible can participate, Fasse said.

One provider group that has worked closely with AAHomecare in the fight to defeat competitive bidding is Waterloo, Iowa-based VGM, which operates Home Link, a Northwood competitor.

“I wish Northwood had talked to someone before they did this because we’re close to beating back competitive bidding for the forseeable future,” said Home Link President Dave Kazynski. “If you want to make something happen, go ahead and consider something a possibility.”

As to whether the network model is a good one for national competitive bidding, Kazynski added: “They’ll be plenty of time to address that if it happens.” HME