Providers opt to grandfather, albeit reluctantly

Thursday, December 2, 2010

YARMOUTH, Maine - Provider Tim Bates just wants to take care of his patients. That's why the president of Premier Home Health Care in Orlando, Fla., decided to be a grandfathered provider of oxygen, CPAP and hospital beds under competitive bidding.

"I really want to keep the patients I've got and take care of them the best I can," said Bates. "I'm still not sure it's the right move to make, but I don't want an out-of-state company taking care of these people."

HME providers in the nine competitive bidding areas (CBAs) who did not win Medicare contracts for affected product categories had until Nov. 17 to alert beneficiaries and CMS whether they would become grandfathered suppliers.

For some, the decision was an easy one. Provider Rick Perrotta said it made more financial sense to grandfather hospital beds than to pick them up and send beneficiaries elsewhere.

"Does it make sense for me to spend $100 to pick up a bed and bring it back, and let it sit there for three years?" said Perrotta, president of Network Medical Supply in Charlotte, N.C. "It makes more sense to leave it out there and collect what you can."

Grandfathered providers for capped rental items like beds and CPAP machines will continue to get paid at the fee schedule amount. For oxygen, providers will get paid at the new bid amount, which is, on average, 31% below the current fee schedule.

Despite the low reimbursement, many providers report they feel duty-bound to grandfather for their patients. Pro2 Respiratory Services cares for 1,300 patients in the Cincinnati CBA.

"We do not believe there is enough capacity in the Cincinnati CBA to handle the patients," said John Reed, executive vice president and COO. "We have a fundamental problem with putting people we've cared for a long time at risk, and we believe the risk is significant."

Also, some money is better than none, say providers.

"It's still a revenue stream," said Tammy Zelenko, CEO of AdvaCare Home Services, in Bridgeville, Pa., part of the Pittsburgh CBA. "Fortunately, we are only about 12% Medicare or I'd probably be crying right now. It's not easy to take these cuts."

Provider Rob Brant said "no thanks" to being a grandfathered provider for CPAP. But it hasn't been an easy decision to live with.

"Patients are refusing to give the equipment back," said Brant, general manager of City Medical Services in North Miami Beach, Fla., part of the Miami CBA. "They don't understand what's going on. We get calls all the time asking if we are a bid winner."