Features
Inevitability and Opportunity
The bitter reward for a hard-won competitive bidding delay came to fruition this January in the form of a 9.5 percent cut on a number of product categories, including diabetes supplies. But like Jason from “Friday the 13th,” competitive bidding is not dead, and continues to lurk in the shadows.
After three months of living in the new reality, providers are feeling the effects to varying degrees. By most accounts, oxygen suppliers have raised the most concerns, while diabetes providers have largely chosen a quieter path.
Frank Suess, president of Pharma Supply Inc., says the 9.5 percent cut has, in some cases, brought reimbursement for test strips to a lower level than some manufacturers' prices. “The only way for diabetic providers to stay in business and make money is to use a less costly product,” says Suess.
Virtually all manufacturers acknowledge heavy price competition now and in the future.
Clay Stribling, an attorney with the health care group of Brown & Fortunato, agrees that cost concerns will likely drive providers to think hard about the products they carry. “I think there is going to be a lot of pressure on manufacturers during the next year or two to compete with each other for the HME business, because so many suppliers are going to have to be cost-conscious,” he says.
“I think a lot of providers are going to have to modify their practice of giving out high-end items under the Medicare allowable, and have to scale back to lower-end items under the Medicare allowable — just because the margins are not there to support them.”
Maureen Ursprung, director of national accounts for AgaMatrix' WaveSense, points out that in good times and bad, lean operations and additional product lines are vital to survival. “A lot of providers are looking at consolidating and tightening their belt, and they should also be diversifying their product categories,” she says.
“If we can come in and offer a valuable marketing program, give providers the right tools and help with the reimbursement [cut] — we can make it a win-win situation.”
