MIAMI — In its weekly newsletter, the Accredited Medical Equipment Providers of America said competitive bidding is not what CMS describes and will, in fact, result in numerous problems.
The organization detailed six issues it predicted will surface through Medicare's DMEPOS bidding program:
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1. CMS AWARDED "SUICIDE BIDS" THAT WILL CAUSE RUIN.
No company that applied in any category made more than a 6 percent profit in the years prior to the bid, so no one can take a 40 percent cut in reimbursement rates and survive.
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2. CMS APPROVED RATES FAR BELOW ACTUAL COSTS.
Although CMS assured the government and providers it would not allow bids that were below the cost of equipment, CMS accepted bids that are below the actual wholesale cost of supplies. In categories such as liquid oxygen, enteral feeding and more, the reimbursements are far too low for anyone to do anything but lose money.
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3. CMS ALLOWED UNVIABLE AND FRAUDULENT COMPANIES TO WIN.
Many of the companies that were awarded contracts did not have the finances to justify they could remain in businesses with or without the bid. Many companies that are viable lost in the bid. In addition, companies suspected of fraud by virtue of the fact that they are on 100 percent pre-paid audit [status] and have records of 40 percent or more denial of claims, were awarded.
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4. CMS IS ALLOWING SAME-DAY SERVICE TO DISAPPEAR.
There is no way to make a profit in most of the categories, but the only sure way to create drastic savings in a medical equipment business is to eliminate same-day service. Doing so will help control travel cost, but it will force many patients in need to go to emergency rooms and will keep hospital-bound patients in hospitals longer.
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5. CMS' CUTS TO REIMBURSEMENTS ARE MORE THAN PROJECTED OR VIABLE.
The reported 32 percent savings does not take into account the 9.5 percent cut taken two years ago as a temporary cut until a solution to competitive bidding could be found. Combined, the cut is actually 41.5 percent from the 2008 allowable. Diabetes rate is 64 percent below the 2008 allowable and the current rate for power wheelchairs is at 70 percent of the 2006 [stet] allowable.
"This is unsustainable and our government never intended such great cuts. In addition, removing complex rehab from the average (which is a limited category of specific providers), you get 36.25 percent before the 9.5 percent cut is added. Companies treading water with audits, slow pay, caps in wheelchair and oxygen and more cannot survive with any one of these cuts.
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6. HOSPITAL DISCHARGE DELAYS WILL DRIVE UP COSTS.
Case managers and hospital discharge personnel will have to contact multiple HME companies to arrange equipment for discharge as opposed to calling one provider today. Remaining companies will plan at least 24 hours to arrange equipment, resulting in patients remaining in hospitals longer, costing the government more money and causing problems for the hospitals."
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