Opportunity knocks?

Tuesday, July 31, 2007

YARMOUTH, Maine - When it comes to competitive bidding for mail order diabetes supplies, providers can't decide whether the program will open new doors or merely allow them to retain current clients.
For providers who offer only local delivery or regional mail order, competitive bidding could be a boon.
"We're looking at it as a growth opportunity," said Raul Lopez, director of operations for Miami Lakes, Fla.-based Bayshore Dura Medical. "Especially if you're looking into bidding in the different competitive bidding areas (CBAs), I think there's definitely some decent profit to be made with volume."
CMS estimates that 60% of Medicare beneficiaries already receive diabetes supplies through the mail. Many in the industry speculate that the agency sees NCB as a way to shift more beneficiaries to mail order.
Winning contracts in multiple CBAs or in areas that are geographically far away from their home bases will require extra effort from providers, say others. Tim Cady, president of Carlsbad, Calif.-based mail order supplier Advanced Diabetes Supply, plans to bid in all 10 CBAs. If he wins, he will have to work to win over customers beyond the West Coast where he has a strong presence.
"It could be a growth area but it depends on how aggressive Medicare is in advertising the program or how aggressive we are in advertising in those CBAs," said Cady.
Without advertising, winning a contract won't provide much new business, agrees Frank Suess, president of Pharma Supply in Wellington, Fla. He plans to bid in all 10 CBAs, but most of his current patients live in unaffected rural areas.
"We still have to spend money to advertise our service in those areas," said Suess. "How will the patient know to call me, (if I win contracts)?"
As with other product categories, diabetes suppliers are concerned that rock-bottom bids will force them to stop doing business with Medicare. Weaver McClure, president and owner of Med Star Diabetic Supply in Forest Hill, Texas, plans to bid in the Dallas-Fort Worth CBA, where Medicare comprises about 28% of his business. Even if he wins a contract, he's not sure how much of a boon it will be.
"You can't bid low on this type of deal because then you're stuck with it," said McClure. "There's not a lot of margin. Postage has gone up and the carriers' rates have gone up. If the bid comes in low, we're not doing Medicare."