The American Way—Not

On March 21, CMS and its Competitive Bidding Implementation Contractor notified bidders of whether they would be offered a contract to provide items in each of the initial bidding areas in round one. The CBIC had six months to review the bids but requested a 10-day turnaround for suppliers to respond with a yes or no answer, and stated that it needs four weeks thereafter to finalize the list of “winning” bidders.

The program is scheduled to be effective July 1 in 10 large U.S. cities. This means that patients will have less than six weeks to find a winning supplier if theirs did not “win,” and transition their products and services to another supplier. Winning suppliers will take a 26 percent payment cut, on average, and will have a short period of time to ramp up product inventories (assuming they are credit-worthy), hire and train new staff and purchase trucks.

Given the high likelihood of significant negative impacts starting in July, and the series of fundamental procedural flaws already identified, every impacted provider must contact their legislators and ask them to tell CMS that it must postpone the program until errors can be fixed, and the industry and CMS can agree on an alternative system.

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Real Impacts

• Local market disruption: Long-standing local companies who have offered quality home care services for decades were excluded from participating, and will be forced out of business based upon government fiat. This will result in significant local market disruption.

• Beneficiary disruption: Over 3.5 million Medicare beneficiaries will be impacted by round one. Beneficiaries have come to rely on the long-standing relationships they have with their home oxygen and DME providers. Not only will they be surprised to discover their long-time provider may no longer be able to serve them effective July 1, they will also be faced with obtaining services, equipment and supplies from multiple new suppliers — some of which may not be local or experienced in providing the care they need.

• Good companies arbitrarily eliminated: Many suppliers traditionally serving beneficiaries did not win the bid for products representing their core business. It appears that non-traditional and “long-distance” providers with little or no history serving these markets won bids simply because they bid the lowest prices.