Getting Back To Business

The effects of Medicare's competitive bidding delay are a complicated matter. Home medical equipment providers and manufacturers have mixed emotions, ranging from exhilaration to frustration to a fear of complacency from some who believe the “war” is over.

But speakers and exhibitors at Medtrade 2008 say there is much work still to be done in Washington and it is time for the industry's providers to create a business model that is sustainable — regardless of what happens next.

“The delay of competitive bidding did not solve the problem. It gave us some breathing space,” says Ron Bendell, president, VGM & Associates, Waterloo, Iowa. “However, in September, [Acting Administrator] Kerry Weems said CMS is in the process of drafting competitive bidding ‘1.2’ and has issued an RFP for the first round, so it's not over in any way, shape or form. We hope this version would be more fair, but I wouldn't guarantee it.”

So once again, not knowing the rules or the outcome, providers must assess their businesses and ascertain what steps they must take to remain viable.

“Competitive bidding forced many of us to reevaluate our business models, and although the bidding process has been postponed, the net effect is a decrease in reimbursement,” says provider Richard Davis, director of human resources, Barnes Healthcare Services, Valdosta, Ga.

“Couple that with the oxygen cap coming up in January 2009, and it has created the larger need of becoming more efficient in how we do business. All of us are looking at ways to cut expenses to deal with less revenue. Of course, we all want to increase our sales, and that should remain a priority.”

Here's how the experts say you can prepare for 2009 and beyond.

STEP ONE: FACE THE CHALLENGES

There are a variety of stumbling blocks HME providers confront on a continual basis. Legislative threats, reduced reimbursements, operational issues. The ongoing burden fraudulent providers place on the industry continues to bring increased scrutiny from lawmakers and regulators.

Providers of home oxygen and respiratory care products and services face additional hurdles as the 36-month oxygen cap, mandated under the Deficit Reduction Act, becomes a reality in January. Companies offering sleep disordered breathing products are facing new rules under the DME MACs' recently revised local coverage determination on PAP policy.