Competitive bidding launches through cloud of HME industry skepticism
by Dave Parks
Tuesday, February 14, 2012

Amid skepticism from the HME industry, registration just closed, and the bid window is open for Round 2 of Medicare’s Competitive Bidding Program. Many providers are busy working out strategies and calculations. Just before all this activity, HomeCare Monday surveyed HME providers on competitive bidding’s impact on their businesses. Here are two questions asked, and a sampling of responses:

Q: In general, were you prepared for competitive bidding, and do you find the process manageable?

Answers:

  • “No. I was not prepared. I do not find the process manageable. In fact I find it very confusing."
  • “I think you have it backwards. The system is managing us.”
  • “We decided not to participate upon implementation of Round 1. We are in a Round 2 area. It has been a great relief to us, stress wise, and financially as well, to focus on non-bid items."
  • “No one can be prepared as the current program design provides incentives for supplies to irrationally bid below their costs.”
  • “It takes a large amount of effort to prepare for, but with education and effort from VGM and Medgroup I believe it’s manageable.”
  • “We do not feel this is an industry to stay in after competitive bidding.”

Q: What is your No. 1 complaint about or difficulty with competitive bidding? Please try to be specific and brief.

Answers:

  • “Ignorance on both sides—supplier communities and CMS regarding how the program works, and how bidding a too low price hurts everyone.”
  • “The lack of response from Medicare when information about your company is missing. You are automatically eliminated from the bidding system.”
  • “Not being able to get a straight answer from government agencies when I inquire.”
  • “It requires covering an unrealistically large service area as what will probably be substantially reduced prices.
  • “Non-binding bids because they offer an incentive for suppliers to bid below their cost and hope the contracted amount is higher than their bid. This process results in irrationally low contracted prices.”
  • “Impossible for a small HME business to be able to afford the expertise it takes to understand, calculate and submit bids.”