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Invacare's Blouch: Shocked Industry Struggles with Response to Bid Rates
ELYRIA, Ohio — "We could spend two hours talking about the flaws in the program," Invacare interim CEO Gerald Blouch said of national competitive bidding. "Many of the things CMS was criticized for in the first round have not been addressed and not been corrected."
As for the Round 1 rebid rates, he said, "In a general sense, I don't think even the government anticipated the depth of the average reduction."
Blouch, who made the comments during the manufacturer's second-quarter earnings call July 22, also announced that Invacare Chairman Mal Mixon would return to the position at the end of the month following a mild stroke.
"He's announced that he's going to continue his rehab and he's returning at the moment as chairman of the board," Blouch said. "Jim Boland, who's been acting chairman, will go back to his role as lead director. Mal is phasing himself back in, and we'll see what the future holds."
Blouch called industry reaction to the July 1 bid rates announcement one of "shock."
Within 48 hours, he said, HME's major players including associations, manufacturers and providers got together to caucus on the direction the industry should take now in response to the bid program. Reaction "ranged from 'let it crash and burn' to 'buy your way out of it,' as was the case in the trial program a couple of years ago," he said.
"I don't think there's a consensus right now on the approach the industry will take," Blouch added. "I don't know if the industry can afford to take an across-the-board cut, and we're not sure whether the rest of the industry who didn't participate in the bids wants to pay for the folly of a handful of people in a flawed process."
Bloch said Lincare CEO John P. Byrnes had summarized the situation well. In a statement accompanying the giant provider's Q2 earnings report, Byrnes said the average 32 percent payment cuts resulting from the bid came from a flawed pricing mechanism and warned they could mean "the sacrifice of critical patient services."
"One of the key things is you've got people who clearly bid low in hopes they would get a bid [thinking] then they could live on the average," Blouch said.
