At the time our staff planned HomeCare's editorial calendar for 2008, we decided it would be beneficial to present information from their peers that might help home medical equipment providers contemplating round two of national competitive bidding.

Who knew when it came time to field our competitive bidding survey in April, particularly considering the impending July 1 implementation date for round one, CMS would have disqualified 630 of the 1,005 bidders and would not yet have announced the contract winners? Who knew the zip codes that define the round two competitive bidding areas would not have been released, or that the agency would extend the deadline for accreditation application for round two participation?

Ah, well, in spite of the changes and the information they were missing, 395 providers shared their thoughts about competitive bidding — about round one, about round two and about their company strategies moving forward. Their responses to the survey questions, compiled on the following pages, speak for themselves.

We also asked participants to answer this question: If you could talk directly to acting CMS Administrator Kerry Weems, what would you tell him about Medicare's DMEPOS competitive bidding program?

Almost 300 providers took the time to pen thoughtful answers that show their frustration with the bidding program, their worries about their businesses and their concern for Medicare patients. A representative sample of their answers, which also speak for themselves, are printed in this section.

Survey Fast Stats

• About Payment Rates and Contracts

  Fifteen percent of respondents operate in one or more of the 10 MSAs in round one of competitive bidding, and 35% operate in one or more of the 70 MSAs designated for round two. Fourteen percent operate in both a round one and a round two MSA. Among respondents with 10 or more locations, 80% operate in one or more current or future bidding areas.

• Half of respondents plan to bid in round two. Among these, 72% indicate their company is currently accredited, 20% have applied for accreditation and 8% had plans to meet the May 14, 2008, deadline for accreditation application. (The survey was fielded and results taken before CMS extended the accreditation application deadline for round two.)

• Among respondents who said they will bid in round two, 41% began planning two or more years ago, 36% have been planning to bid for one year or less and 23% began planning when the round two MSAs were announced.

• Over one-third (36%) of respondents who are planning to bid believe they are ready to craft a reasonable bid, but 29% want more information from CMS about the bids in round one.

• More than nine in 10 respondents (92%) planning to bid in round two said they will do so independently, and another 7% plan to bid as part of a network.

• Nearly one-third (30%) indicate they would need to subcontract with other companies if they were offered and accepted a contract in round two. Sixty-six percent said they would be able to service the bidding area without subcontracting.

• Only 14% of respondents said they would not accept a contract in round two if the payment rate was lower than their bid. Sixty-three percent said it would depend on how much lower; 5% would accept a bid; and an additional 14% feel they would have to accept a contract in order to stay in business.

• Forty-three percent of respondents do not think their company could remain viable if the reimbursements that are set in round two are dramatically lower than current rates. An additional 42% are unsure, while only 14% believe their company would remain viable.

• Respondents are mixed on the bids for round two: 30% think they will have to bid lower than the contracts in round one to win a contract, while 64% think that round two bidders will submit bids that are higher than those in round one.

Based on the round one payment rates set by CMS (with the average reduction listed next to each product category), if you had been offered a contract, would you have taken it?

	Accept	Decline	Not Sure
Walkers and related accessories (27%)	37.2%	32.4%	24.3%
Hospital beds and related accessories (29%)	35.9%	34.4%	21.8%
Oxygen and oxygen equipment (27%)	35.2%	34.7%	23.5%
Continuous Positive Airway Pressure devices, respiratory assist devices and related supplies and accessories (29%)	33.9%	33.9%	25.3%
Standard power wheelchairs, scooters and related accessories (21%)	29.1%	38.5%	23.0%
Enteral nutrients, supplies and equipment (26%)	21.8%	42.3%	27.1%
Complex rehabilitative power wheelchairs, scooters and related accessories (15%)	20.5%	45.3%	24.3%
Negative pressure wound therapy pumps and related supplies and accessories (14%)	17.2%	41.8%	31.1%

If you could talk directly to acting CMS Administrator Kerry Weems, what would you tell him about Medicare's DMEPOS competitive bidding program?

Following is a representative sample of providers' responses to this write-in survey question.

1) You are killing small business. 2) Just lower the current allowable rates … and set a date that everyone must be accredited. That way everyone can participate. 3) You should take the money (tax dollars) that is being spent on the implementation of competitive bidding and put it in the OIG to reduce fraud and abuse. 4) If you are going to move ahead with round one, give more time to evaluate the success and make changes before you move into round two.

A competitive bid would have suppliers setting prices based on cost of doing business, not starting at a predetermined CMS rate and then bidding lower. Many suppliers are bidding low from the fear of losing their business.

A number of round one bidders were rejected for failure to provide a complete and accurate bid package when, in fact, they did. How do you explain this, and why should I be confident that my bid won't be rejected due to some reviewer's incompetence?