Shaping Up for NCB

As we all try to understand what the effects of Medicare's final rule on national competitive bidding will be, many HME providers are feeling uncertain about their future with Medicare. However, rather than being nervous or concerned, now is the time to prepare for competitive bidding and its implications even if you are not located in one of the first 10 MSAs where it will occur.

Whether or not you decide to bid, working to make your company run more efficiently is a worthwhile exercise. If anything, it readies you for the next phase in this all-too-fickle industry — and you can make modifications as part of this exercise that will benefit your company.

Competitive Bidding Facts

• Savings

  Medicare will not pay more than what is allowed under the present fee schedule. In other words, Medicare must save money on competitively bid products.

  In the demonstration projects concluded in 2002, Medicare realized a savings of approximately 20 percent. Although CMS cannot dictate a specific savings amount in 2007's first bidding round, that 20 percent is a gauge since there is no other historical precedent.

• Multiple Winning Providers

  Competitive bidding contracts must be awarded to multiple entities within a bidding area. Technically, “multiple” means two or more.

  In reality, Medicare will examine capacity based upon the number of Medicare beneficiaries and utilization to determine how many providers are needed in each area. The variable is the capacity of the provider. For example, if you are small today but plan on growing, you must show Medicare how you will do that (e.g., financial planning).

  Once CMS feels comfortable that Medicare beneficiaries' needs will be met in the most economical way with quality providers, the number of winning bidders will be cut off (unless a legislative remedy changes things).

  To make sure Medicare meets the potential for fluctuating businesses and the changing needs of its beneficiaries, it is likely that CMS may select more providers than are needed. This would provide a cushion for both Medicare and the beneficiary, in addition to offering more patient choice.

• Single Payment

  There must be a single payment established for each item in a competitive bidding area. This means that there will be only one price for a particular item in a specific CBA.