Opportunity knocks twice

Thursday, August 31, 2006

After David McCall sold his DME company in 2002, he saw plenty of opportunity as an industry consultant. Now, with competitive bidding staring providers in the face, he hears opportunity knocking again.
The owner of A Plus DME Services recently debuted the National Competitive Bidding Supplier Network (www.nationalsuppliernetwork.com) to help small local providers band together to participate in NCB.
"I've heard some DME companies talking about starting their own networks, but I'm not sure that is going to happen because of the inherent mistrust," said McCall. "I know if I'm a DME provider, I don't want to send my patient information to another DME company."
CMS plans to kick off competitive bidding in 10 cities (metropolitan statistical areas or MSAs) in 2007. As a way to ensure that small providers can compete with larger HMEs, the draft bidding plan allows providers to form networks and bid collectively. The industry's largest provider groups--The MED Group, VGM and Northwood--have already begun planning their network bids.
As a consultant who, among other things, provides billing services to HMEs, McCall says, he's perfectly positioned to administer bidding networks in the different MSAs.
To join his network, providers pay a $250 application fee plus $65 a month. Once the network grows to 250 to 300 members, McCall plans to negotiate preferred pricing with manufacturers. The site also gives members information on a variety of important topics like accreditation and links to the DMERC and other key Web sites.
When it comes to competitive bidding, the network will analyze the program "and give advice and maybe bidding strategy on what items to submit bids on and at what price," McCall said.
McCall plans to charge providers just enough money to cover his administrative costs associated with submitting the bid. The network's main source of revenue will come from billing Medicare on behalf of members participating in the bid. McCall said he can do that for less money than most small HMEs, those grossing $1 million or less a year.
When it comes to competitive bidding, McCall said, it's critical that small HMEs participate. Medicare's draft bidding plan allows providers who don't win a bid to keep serving their existing Medicare patient base.
"But we all know that by simple attrition, patients die or move away," he said. "You lose patients every day and if you can't gain any new ones, you are destined for a slow death."