Bona fide this


The more I think about the mail-order program for diabetes, the more it ticks me off. I mean, every week folks (not just in the diabetes space) come up with all sorts of creative ways to criticize the program or question various technical aspects. And, while I have covered this in depth, the more I think, the more questions I have.

For example, by its own estimates, CMS has said that about 6 million beneficiaries are expected to be impacted by the mail order program (that's in line with the percentage of beneficiaries who use mail order anyway). But isn't that estimate based on bennies having ample local choice if they so, uh, choose? If you consider that CMS changed gears mid-stream (like, after the bids were submitted) and decided to apply mail order pricing to everyone, than wouldn't that mean CMS should, to use one of its favorite words, extrapolate those numbers? After all, even before the Round 1 rates (56%) came in, before the Round 2 rates (72%) came in, CMS has said that bennies would have that choice, indeed that safety valve of your friendly local diabetes dealer?

With such a drastic cut, it's a good guess that a lot of those safety valves are going to plug the drain that is Medicare diabetes. Leaving, oh, let's take a guess, a few million more beneficiaries to switch to mail order providers who were awarded contracts based on smaller capacities.

Also, and this could apply to all categories, but, if providers submitted bona fide bids, based on what they could afford to offer a product for (and submittted the invoices to back it up), and then accept contracts at far below what they bid, how is that supposed to work? I mean, call me naive, but if wouldn't they have bid lower if they thought they could afford that? Is CMS requiring contractees to prove they can still honor contracts at those much lower rates?

Theresa Flaherty



I agree entirely!  I've spoken to several providers in Portland, OR and it seems that most are just not going to bother with diabetic supplies going forward.  The sentiment I'm getting is that the quality of what they can provide for the bid price is so bad that they fear customer service and liability issues if they go forward with it.  I don't see how the big mail orders are even going to pull it off.   If you're losing money on 70% of what you're doing within the category, and your customer base increases 10 fold, don't your losses just increase relatively???