Subcontracting: Not what it’s cracked up to be

‘The bed looks like it came from the 99-cent store’
Friday, October 11, 2013

YARMOUTH, Maine – Junk equipment and slow service were not what some subcontractors expected to provide when they signed on the dotted line.

Provider Rick Wilson is in a Round 2 competitive bidding area and subcontracts for several product categories using inventory provided by the contract supplier.

“The bed looks like it came from the 99-cent store,” said Wilson, vice president of Apguard, Medical in Woodland Hills, Calif. “Two of the concentrators we set up the first night failed. It’s just been a mess.”

Making the problem worse: The contract supplier got behind on equipment shipments to Apguard, which then ran out of inventory. Apguard refuses to provide its own equipment at the single payment amounts, so there’s been a delay in getting equipment to patients.

“I had a patient that couldn’t get the bed for two days,” said Wilson. “The daughter finally gave us a credit card to pay out-of-pocket.”

Provider David Chase says it’s been difficult to point beneficiaries toward lower-end equipment—such as a heavier rollator—that the contract supplier requires him to provide. His retail location also carries some high-end rollators.

“They look at the others we have on the floor, but we have to say, ‘No, this is the one we provide you,” said Chase, CEO of Hampton Home Care in Southampton, N.Y. “It’s a total 180 from when we always had the best products.”

For Wayne Sale, subcontracting hasn’t been a sustainable business model.

“You make a delivery, you get paid for it and then you don’t have income again until you make another delivery,” said Sale, president of Health First in Richmond, Va.

Sale gave up on subcontracting after a few months and is in negotiations with a contract supplier to sell the 31-year-old company.

“I wanted my company to survive and to be a player in the Richmond market,” he said. “The only way to do that was to find a company that had contracts.”

The mindset of some contract suppliers—and Medicare—is that home medical equipment is a commodity item, with little regard for quality or service, says Chase.

“A lot of these companies are not responsive,” he said. “Maybe we were over-responsive. The end result is that the patients will suffer.”


I do believe after 35 years in this industry the govt. should change the name Medicare to Doncare. Beauracrats without a heathcare background have no business making healthcare law. We are saddled, maybe straddled with bean counters that are ignorant  of what patient care and service consists of and  what it costs. (US)  After watching the vets storm the WW2 monument don't you wish a ton of elderly people would dump their equipment in a pile outside every politicians Senate door. Maybe toss in a used BSC

It is my opinion that if the payor, no matter who they are wants to pay for $1.00 worth of product then we should deliver $1.00 worth of product! The service component was NEVER ask for from CMS. In a meeting with CMS at the early stages of the CB program, CMS held a information session and a Q & A at The Drake Rehab Center located in Cincinnati, Ohio. One of the CMS officials stated bluntly that " We nevere ask for service! We just want to rent equipment"! He went on to explain that we created this problem by offering service in the first place! I believe that our industry HAS to deliver products that will allow us to pay our staff, invest in the future of our business, make a, dare I say it "PROFIT" and create new jobs!! If that means we provide the least expensive products available, then so be it!! It is not by our hands!!! Until the real problem is talked about in the political circles, that the system is under funded, then we are stuck on this path and will continue down this slippery slope! I have been in the medical feild since 1974 as a clinician and in management and as a owner of a DME company. I base my opinion on the history of this of this industry as a whole! We as a group have to toughen up and make the decision to run a business as a business. It does not mean that we are cruel or non compassionate, it just means that we have to base our decisions on profit and loss on every function in our business. We should hand out business cards with CMS and their Congressmans phone numbers on them and explain that we understand and agree with how they feel and that they should call these people and complain! The only thing that will change this is enough complaints being heard! I am located in the re-bid of CB in the Cincinnati area and have already heard from referal sources that when trying to discharge patients from the hospital they are having to wait until the DME company goes to the area on their normal delivery day. In one case it was an O2 patient that was going to be discharged on Friday and the company told them they would deliver the O2 on Tuesday when they are in that area!! That is renting equipment just as CMS wants! If they want service then same day delivery is service! This will become the norm for companies that will survive. Those that still do same day at the current pricing will go out of business. Sorry for the long winded post! As a clinician I am appalled at what we are having to do to stay profitiable! Thank you.