Round One Shocker: It's Bad, Say Complex Rehab Experts

Averaging 15 percent off current reimbursements, the payments CMS set for complex rehab under round one of competitive bidding, coupled with the scant number of contracts offered in the product category, were shocking to members of the rehab community, which has been fighting — thus far unsuccessfully — to have complex rehab equipment excluded from the program.

“I don't like the reimbursement numbers I am seeing,” said Gary Gilberti, vice president of the National Coalition for Assistive and Rehab Technology. “It's tight already; we have companies that are barely making it on current allowables. I think a lot of people bid out of fear. I think they bid low to try to keep their share of the market.”

Gilberti, president and CEO of Chesapeake Rehab Equipment, Baltimore, said his company won its bid in Charlotte, N.C., but lost in the Pittsburgh CBA.

“And I am glad I didn't bid in some of the other markets, considering how low those numbers are,” he said.

Tim Pederson, CEO of WestMed Rehab in Rapid City, S.D., agreed that the numbers are surprisingly low, especially since, he said, “it's completely inappropriate to competitively bid complex rehab at all.”

“It's bad,” said Pederson, who also serves as chair of the American Association for Homecare's Rehab and Assistive Technology Council. “Anytime you have reimbursement reductions of that magnitude, it's bad, because our profit margins are already so thin.”

In addition to the round one reimbursement rates, many are also concerned that only five or six companies were selected as bid winners in five of the 10 bid areas. This means that, come implementation on July 1, some bid winners will be responsible for providing equipment and services for up to 20 percent of those MSAs.

In analyzing the problems concerning competitive bidding and complex rehab, Rita Hostak, NCART president and vice president of government relations for Sunrise Medical, Longmont, Colo., offered the following list:

• There are many reports of experienced rehab suppliers being disqualified due to bid amounts that someone judged to be too low. The irony is that many single payment amounts for items in category 3 are below supplier acquisition cost, so, these decisions appear to be arbitrary. The lack of judicial recourse is causing tremendous concern for these suppliers and the Medicare beneficiaries they serve.