Sometimes, it’s best just to say no—even when it comes to Medicare reimbursement.
More than a year after the Centers for Medicare and Medicaid Services implemented its competitive bidding project in nine areas throughout the country, Jesse Riggleman, director of Kittanning, Pennsylvania-based ArmsCare, has no regrets about turning down Medicare contracts in the Round 1 Rebid.
It wasn’t an easy decision for Riggleman and his staff to make, but it was a clear one, he says. “When the prices came out we discussed it and said no way, in any of the categories,” says Riggleman, whose full-service home medical equipment company won a CPAP contract, among others. “It wasn’t just the cost issue compared to the reimbursement issue, it was the whole matter of taking care of the patient at all. I hope that when the Round 2 bidders came up with their bids they considered that. The patient being taken care of should be their primary goal.”
The Medicare competitive bidding rates in the Round 1 Rebid were nowhere near enough to pay for the care attached to providing the various products, Riggleman explains. “We couldn’t make any money at the prices they offered. It’s not that we don’t want to do it; we would love to. But what cuts would I have to make in order to do so?”
Inevitably, Riggleman says, ArmsCare’s customer service would have taken a hit. “Who loses out in the end? It’s the Medicare recipient. They aren’t getting the service they are used to.”
So Riggleman rejected the contracts and, frankly, ArmsCare has lived happily ever after. In fact, he says the company is so busy his staff “cannot keep up with it.”
That wouldn’t have been the story 10 or even five years ago. Then, it would have been a grim ending for the hospital-affiliated HME provider. But companies can change, and ArmsCare has changed dramatically, indeed.
ArmsCare opened in 1985 with three employees. While the company has grown over the years, customer service remains a primary goal.
Transformation Time
Riggleman became involved with ArmsCare in 2004 as a health care consultant the company brought in to help determine its direction. Affiliated with Armstrong County Memorial Hospital, ArmsCare was launched in 1985 to allow the hospital to better serve the community and its growing need for HME. The three initial employees ran the business out of a supply closet in the garage of a maintenance building behind the hospital. By the time Riggleman came on the scene, ArmsCare had seven employees and was housed in a suite at the rear of the hospital.
The company’s business was almost 90 percent insurance. Retail was definitely not a key component. “ArmsCare had a small, 5- by 8-foot display area at the time,” Riggleman recalls. “One wall of soft goods, one of diabetic supplies, and one of odds and ends, but it had a 4,500 square-foot warehouse below.”
One popular retail item at ArmsCare is the Skinit, a sleeve for ResMed CPAP products. The line is available emblazoned with a variety of sports and college/university logos.
That warehouse space allowed ArmsCare to carry a large inventory. The only problem was that customers had to walk down a flight of stairs, and they also had to navigate a 30- to 40-foot ramp to the front door; a bit dicey with snow and ice in winter.
“That wasn’t the most prudent thing for people who often had mobility issues,” Riggleman says. The company also had an identity crisis. It did not do any marketing or have a sales rep. That was a problem, and not only in the community.
“ArmsCare was the best-kept secret in the hospital,” he says. When he talked to hospital staff about ArmsCare, their response was often: “What’s ArmsCare?”
