Averaging 15 percent off current reimbursements, the payments
CMS set for complex rehab under round one of competitive bidding,
coupled with the scant number of contracts offered in the product
category, were shocking to members of the rehab community, which
has been fighting — thus far unsuccessfully — to have
complex rehab equipment excluded from the program.
“I don't like the reimbursement numbers I am
seeing,” said Gary Gilberti, vice president of the National
Coalition for Assistive and Rehab Technology. “It's tight
already; we have companies that are barely making it on current
allowables. I think a lot of people bid out of fear. I think they
bid low to try to keep their share of the market.”
Gilberti, president and CEO of Chesapeake Rehab Equipment,
Baltimore, said his company won its bid in Charlotte, N.C., but
lost in the Pittsburgh CBA.
“And I am glad I didn't bid in some of the other markets,
considering how low those numbers are,” he said.
Tim Pederson, CEO of WestMed Rehab in Rapid City, S.D., agreed
that the numbers are surprisingly low, especially since, he said,
“it's completely inappropriate to competitively bid complex
rehab at all.”
“It's bad,” said Pederson, who also serves as chair
of the American Association for Homecare's Rehab and Assistive
Technology Council. “Anytime you have reimbursement
reductions of that magnitude, it's bad, because our profit margins
are already so thin.”
In addition to the round one reimbursement rates, many are also
concerned that only five or six companies were selected as bid
winners in five of the 10 bid areas. This means that, come
implementation on July 1, some bid winners will be responsible for
providing equipment and services for up to 20 percent of those
MSAs.
In analyzing the problems concerning competitive bidding and
complex rehab, Rita Hostak, NCART president and vice president of
government relations for Sunrise Medical, Longmont, Colo., offered
the following list:
There are many reports of experienced rehab suppliers being
disqualified due to bid amounts that someone judged to be too low.
The irony is that many single payment amounts for items in category
3 are below supplier acquisition cost, so, these decisions appear
to be arbitrary. The lack of judicial recourse is causing
tremendous concern for these suppliers and the Medicare
beneficiaries they serve.
The fact that capacity was a key determining factor in the
number of suppliers whose bids would be included in the development
of the single payment amount is a significant concern. The
suppliers are not in any way committed to their claimed capacity
and yet, it eliminated other suppliers from the program that bid
within pennies of the winning suppliers. This certainly gave
competitors an opportunity to block out their competition.
[There are] reports of a high number of winning suppliers in the
complex rehab category that have little or no experience with these
products or the individuals that require them.
The fact that these suppliers would not intuitively understand
the product or service costs related to this category would cause
them to naively bid lower, therefore, blocking out more experienced
and knowledgeable suppliers. The ultimate result will be that these
knowledgeable suppliers could be forced to close their doors or
sell their business to winning suppliers. Suppliers that are solely
dedicated to providing complex rehab technology cannot survive a 30
percent or higher loss of revenue and sustain their business.
The differences from CBA to CBA in the single payment amount
cannot be accounted for in service cost differences. It appears
that the experience of the supplier in terms of providing truly
complex equipment may be the single most variance to cause this
pricing difference.
If a supplier does not recognize the broad range of technology
that fits a single HCPCS code and the fact that consumers with
severe physical disabilities often require a specific product
within a code — meaning products within HCPCS codes are not
interchangeable — the supplier could naively bid based on a
single low cost product within a code assuming that they can
provide that product to anyone needing a product within that
code.
The problem that results is either the supplier begins to see
that he cannot afford to provide the appropriate products at the
single payment amount and drops out of the program (this is the
unlikely scenario — after all, it is the supplier's
livelihood) or the consumer no longer receives the appropriate
device.
Innovation in technology to improve people's lives will no
longer be a viable option for manufacturers of products in the bid
categories; the new goal will only be to reduce costs. Products
will be de-featured, and manufacturing jobs will move overseas at a
faster pace.
The fact that CMS did not require a bidding supplier to have a
physical location in the CBA will cause problems for beneficiaries
requiring complex rehab. To provide complex rehab, the [Assistive
Technology Supplier] needs local support. They require demo
equipment, simulation equipment.
Meeting the medical and functional needs of an individual with
severe disabilities is not accomplished with out-of-the-box
technologies. [Often], a mobility system will require multiple
fittings and may have to be delivered twice, once to the hospital
so the evaluating therapist can assess whether the product
ultimately meets the individual's needs, and again to the
individual's home. This level of service is difficult to provide in
a timely manner if the office is hundreds of miles away.
So what can complex rehab providers do?
For those preparing to bid in round two, Gilberti advised,
“Know your costs … because right now we are doing
nothing but damaging the market with these lowball
prices.”
