Round 2: History not on industry's side

Sunday, March 13, 2011

WASHINGTON - Although CMS hasn't released an official timeframe for Round 2 of competitive bidding yet, home medical equipment providers in those areas are already running some numbers.

When it comes to reimbursement, providers in Round 1 set the bar low: Their bids cut payment rates by an average of 32%. The big question: Will providers in Round 2 go even lower?

"Will we do some of the suicide bids? No," said Dave Hanson, operations manager for Mercy Assisted Care Medical in Janesville, Wis. "We will analyze where the Round 1 bids are at and see if we can meet that or not, or go a bit higher."

Provider Seth Auerbach also plans to do his homework.

"We'll bid as sensibly as possible," said Auerbach, president of Komfort & Kare Home Medical Equipment & Supplies in Westmont, N.J. "I'd like to think everybody else will bid sensibly, too."

Walt Gorski would like to think that, too, but he says history isn't on the industry's side. In the original Round 1, bids came in at, on average, 27% below the current fee schedule compared to the re-bid's 32%.

"We thought, with the re-bid, that providers would take into consideration the 9.5% reimbursement cut and factor that in to their bids," said Gorski, vice president of government relations for AAHomecare. "That was clearly not the case."

It doesn't help that the design of the program is considered by many in the industry to be broken. Some changes could prevent some of the problems associated with Round 1, say providers.

"I am hoping that CMS reframes the bidding a bit," said Kim Brummett, vice president of contracting and reimbursement for Greensboro, N.C.-based Advanced Home Care. "One reset is to make sure the bid is binding so we have people doing much more thoughtful, considerate and appropriate bidding."