TAMPA, Fla.--With national competitive bidding looming, some HME providers are banking on networks or rollups to give them the muscle to compete--and to survive.

Thirty-five small to medium providers in the Tampa, Fla., area in December formed Med Trust Tampa Bay LLC, a sister to Med Trust Corp. of Southern Florida, which was organized early last year.

Med Trust Tampa Bay is aggressively preparing for competitive bidding, said Robert M. Arado, administrator. His company, Caremed Respiratory Services, is spearheading the effort.

"[We are] forging ahead to meet all the requirements to satisfy CMS guidelines for the competitive bid," he said, noting that most of the Med Trust members are accredited. "We are rigorously working with those who are not to get them accredited."

Arado said he hopes all members of Med Trust will be accredited in four months.

In addition, he said, "We're asking all members to increase the credit lines with their vendors. We need to come in as a network with big dollars in credit lines ... Medicare will see that we are a strong player."

Meanwhile, three South Carolina providers--Adaptive Medical in Spartanburg, ApneaRx in Clemson and Mobile Health Care in Greenville--were rolled up into the newly formed Southern Home Medical, a publicly held company that debuted last month. Nearly a dozen more companies are considering joining SHM, according to Greg Tucker, owner of Adaptive Medical and president and CEO of the new company.

Dennis Nowak, RT, owner of ApneaRx, believes the move positions his company and the others for competitive bidding.

"It's a great alternative for anyone who is worrying about competitive bidding and other things that are facing us in DME," he said, noting that under the Southern Home Medical umbrella, "you can purchase better equipment, get better pricing and make a profit at lower charge rates."

Besides, he noted, "There's a chance I wouldn't be in business if I didn't do it."

Waterloo, Iowa-based VGM Group is also forming a network for its members who want to participate.

"We decided to do this because we knew [providers] were going to need help and, simultaneously, we were getting requests," said Jim Walsh, president and general counsel for the buying group.

Walsh sees some benefits, especially for small providers. Being in a network could mean they wouldn't have to work outside their geographical area or service needs they are not equipped or accustomed to handling, he said.

But not everyone favors networks. In a September HomeCare magazine survey, 61 percent of providers said they planned to bid on their own rather than as part of a network, with 32 percent saying they'll take the network route. While 49 percent of respondents said they think networks are workable, 43 percent said they aren't, giving as their main concerns too much dependence on other companies and headaches with administration and billing. (See "Ready or Not," HomeCare, September 2006.)

Walsh also had some cautions for providers. "We are concerned that smaller providers might fall into networks that don't get the job done," he said. The network "has to be able to technically handle the business ... do the paperwork associated with this, get the payments out to the individual providers without tripping over the obstacles CMS is famous for putting in your way ... Network administrators are going to be holding their money."

Providers must choose wisely, Walsh said. "They're putting their business at risk. Once that deadline goes by, they aren't doing Medicare for a long while." When the bid contracts are awarded, they will extend for three years.

Arado is confident his network has its ducks in a row. "The only drawback we see is if the whole thing is a wash with Medicare and they aren't able to take care of competitive bidding, and we would have put in all this money. But without [the network], we're going to see a fallout of providers that we haven't ever seen before. We have a better chance as a group than by ourselves."

Meanwhile, VGM, under its Last Chance for Patient Choice organization, remains poised to file a federal lawsuit challenging competitive bidding on constitutional and other grounds. All it's waiting for is the announcement from CMS of the 10 MSAs.

"Once those unfortunate entities have been announced," said John Gallagher, VGM's vice president, government relations, "we'll be looking for articulate end-users who would be willing to sign onto a class-action lawsuit."

For more information on Last Chance, visit www.lastchanceforpatients.org.

For more on Southern Home Medical, see "Taking Stock of the Market," HomeCare, December 2006.