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Diabetes statistics are still staggering, and they show no signs of losing steam. Like so many other booming medical categories, CMS put mail-order diabetic supplies on its competitive bidding list long ago. With recently announced bid prices reflecting a whopping 56 percent reduction over previous allowables, it's clear that bureaucrats in Washington are only too happy to go along with the drastic reimbursement cut to lower Medicare's costs.
Who can afford these cuts, and what can be done to offset the effects? The answer to the first question is particularly mystifying, especially considering that someone submitted the low, low bids, and presumably that person/organization believed it was possible to survive at the new rate. While some bid "winners" must be small providers (with no more than $3.5 million in annual sales by CMS' definition), long-time diabetes providers are highly skeptical that anyone but major national chains will be able to accommodate the new bid amounts.
'Shocking and Ridiculous'
Tim Binkley, president and CEO of Valentines Diabetic Supply, has methodically built his business into a regional operation specializing in mail-order diabetes supplies. As a bidder in the Round 1 rebid, at presstime Binkley had not been offered a Medicare contract, and he doesn't think he will be, since his bid was considerably higher than the announced amount.
"The competitive bidding prices are shocking, outrageous, unbelievable and ridiculous," says Binkley without a trace of levity. "Diabetic supplies got cut deeper than any other segment."
Binkley had braced for a sizable 30 to 35 percent cut, but he concedes that the 56 percent figure caught him off guard. Considering that diabetes represents the second highest Medicare expenditure for HME, an act of Congress may literally be the only remedy. One friendly competitor suggested to Binkley that the draconian nature of the cuts could actually work in the industry's favor by catching the attention of lawmakers. He agrees that legislators may yet understand the situation if political involvement remains high.
