Virginia: Medicaid matches competitive bidding prices

Friday, August 22, 2014

RICHMOND, Va. – The other shoe has dropped in Virginia: The state’s Medicaid program on July 1 adopted competitive bidding rates for products that have been included in the program.

This will be the final blow for a number of providers in the state, says Sam Clay, president of Clay Home Medical, whose business is in a bid area.

“There’ve been a number of companies—as many as eight—that have changed hands or closed since bidding started and I fully think this will push some more over the edge,” he said.

Additionally, the state’s move expands competitive bidding rates into areas that hadn’t yet been affected by the bid program, Clay said. 

Previously, the state paid 10% less than the Medicare fee-for-service rate. Now it will pay that rate or the Medicare competitive bidding rate, whichever is lower. 

The state’s move means, on average, a 45% drop in payment on bid items like oxygen concentrators and CPAP devices, Clay said. 

“For some items, that puts it below cost,” he said. “So we’re concerned there’ll be an access problem.”

The state’s industry association, the Virginia Association of Durable Medical Equipment Companies, lobbied against the change, but to no avail, said Executive Director Beth Bowen.

“(Providers) are just alarmed at the continued beating down of an industry that’s supposed to help save money and care for people at home,” she said.