Submit a bid in the Round 2 re-compete? ‘Why bother?’

Friday, February 20, 2015

YARMOUTH, Maine – It turns out the top strategy for many HME providers in Round 2 competitive bidding areas isn’t whether or not to bid higher or lower as part of the re-compete, but not to bid at all.

“We’re submitting no bids,” said Dave Anderson of Anderson’s Medical Products in Terre Haute, Ind., a respondent to the most recent HME Newspoll. “We are just outside a CBA and winning bids did not bring us any more business—probably less—and all our bids can do is drive prices down, so why bother?”

CMS is accepting bids as part of the Round 2 re-compete until March 25. The agency plans to announce payment amounts in the winter of 2016 and winning contract suppliers in the spring of 2016, and to go live with the program July 1, 2016. 

A number of respondents echoed Anderson’s sentiments, adding that low reimbursement rates (a reduction of 45%, on average, as part of Round 2) and high audit rates make Medicare a losing proposition.

“We have chosen not to bid,” said Kevin Jones of All American Medical Equipment & Supplies in Oklahoma City, Okla. “The money coming in from private and state insurance is much more secure. We have watched business after business close their doors because they are getting hammered by audits. Without Medicare, my business has run much smoother.”

In addition to private payers and Medicaid, a number of respondents cited a focus on retail instead of Medicare.

“We opted out of the bids,” said Steve Rogers of Padgett’s Medical in St. Cloud, Fla. “We’re selling retail DME to patients who are waiting 1-2-3 weeks for Medicare-covered items.”

For those submitting bids, the majority of respondents reported they will bid higher, in fewer categories and in fewer geographies, according to the poll.

For providers like Jody Wright, however, there’s only way to bid, whether it’s Round 2 or the Round 2 re-compete or whatever comes after that.

“Our strategy hasn’t changed: bid responsibly, in our own CBA and don’t expect to be awarded a contract,” said Wright of Rocky Mountain Medical Equipment/Major Medical Supply in Lakewood, Colo.