Reaction: 'Jury's still out'

Wednesday, April 30, 2008

FedEx drivers on March 28 probably had no idea that an entire industry was hanging on their delivery of little purple and orange packages. No sooner had bidders in Round 1 of national competitive bidding ripped into their future (certified letters from CMS saying whether they'd lost or won the bid), than the buzz began.
"The jury is still out on the entire program," said Walt Gorski, vice president of government affairs for AAHomecare. "We are apprehensive on a number of fronts, whether it's the number of small suppliers, whether it's the bid rate. We are in the first inning of this game."
Providers who won contracts were proceeding cautiously.
"Out of the categories we won, we are scrutinizing line by line by line," said Georgie Blackburn, vice president of government relations and legislative affairs for Blackburn's in Tarentum, Pa. "We are doing our charts now and then we'll decide whether or not we participate in each of the categories we won."
It didn't take long for the industry to learn something was awry, as a couple of hundred providers said they had been improperly disqualified, mostly for supposedly missing financial documents.
"Clearly, CMS does not have a stellar track record on being able to ensure they calculated and collected all the info they needed in order to properly evaluate these contracts," said Gorski. "There appear to be basic errors in the process."
AAHomecare was pursuing regulatory, legislative and legal remedies and also called for the suspension of the first round of the bidding program until questions about patient access and harm to DME providers can be fully assessed.
A whopping 64% of contracts were awarded to small suppliers, more than twice CMS's planned set aside. It's too early to say what that means, however, say industry leaders.
"There's no guarantee everyone will sign off on this," said Raul Lopez, director of operations for Bayshore Dura Medical in Miami Lakes, Fla. "Many may have thrown in their bids and now they've come to the realization they don't know if they can do a product or service in the metropolitan statistical area."
Said John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers: "It's also a little annoying to listen to CMS use the 64% number as though it represents a huge number of companies. In real terms, we're probably only talking about three or four companies per product category (as opposed to one or two at the 30% small business target). Most providers will be frozen out of the system."
For those small providers that do accept contracts, it will mean a sea change in the way they do business, said Rose Schafhauser, executive director of the Midwest Association for Medical Equipment Services.
"They will have to adapt," she said. "You assume that many have started the ramp-up process, but not too quickly, in case they didn't win." HME