Many providers would attempt to weather Medicare loss, survey shows

About two-thirds of HME providers in Round 2 competitive bidding areas say they will attempt to stay in business if they fail to acquire a Medicare contract in the upcoming competition, according to a survey conducted by HomeCare Monday.

The online survey, conducted in early December, attracted a sample of 59 participants who said they conducted business in locations included in Round 2 of Medicare’s Competitive Bidding Program, which includes 91 metropolitan areas and encompasses about 75 percent of the nation’s HME providers.

Medicare now purchases durable medical equipment for beneficiaries through a network consisting of tens of thousands of small providers paid on a government fee schedule. The Competitive Bidding Program is expected to lower reimbursements by about one-third and award contracts to less than 2,000 providers. Authorities say that will devastate the HME industry.

About three-fourths of providers participating in the survey said they plan to register and submit bids in the program. However, about half of respondents said they didn’t feel they were well prepared to submit bids, and the process for bidding was cumbersome and confusing.

“The process is messed up with too many loopholes,’’ one provider wrote.

“When Medicare doesn’t provide clarity and then releases information with ridiculously short time frames can anyone be prepared?’’ another provider asked.

“We have been preparing for this for a few years,’’ a provider wrote. “The process is very time consuming and difficult to understand if you have not attended any of the many training programs that have been available. We planned as if it was going to happen, and we were hoping that it would not.”

About a third of respondents said they would attempt to sell their businesses or possibly go out of business if they were unable to acquire a Medicare contract under competitive bidding. But about two-thirds of respondents said they had business plans to continue operations without a Medicare contract. Many said they would expand into other areas to offset Medicare losses.

The survey showed there is an air of dismal uncertainty surrounding the HME industry as competition bidding prepares to take its toll.

“The effect competitive bidding will have on other contracts and pricing is the unknown – the determining factor of ‘will we stay in business or not,’’’ one survey respondent wrote. “There are five ‘private companies’ in my city – are they trying to put four of us out of business? Why? There is simply no reason to have a bid in Tucson. Outside companies will come in and take the city over. I predict none of the companies will be here when this is over.”

Another respondent wrote, “Since we are a small supplier, competitive bidding will be less destructive to us, but it will still make us shift, wiggle, and try to come out on the other side.”

One respondent expressed anger and dismay over the new program: “IT IS AN IMPOSSIBLE UNDERTAKING. IT IS UNAMERICAN. IT IS COMMUNIST.”

But most written responses were more reserved, although clearly providers see competitive bidding as leading to a decline in Medicare quality for beneficiaries, and a smaller HME industry.

“Competitive bidding would result in our not being able to provide the quality of product and service for which we are known,’’ wrote one provider, who decided not to participate in competitive bidding.   “Luckily we have adaptive driving equipment as our main source of product, which will maintain us (because the government is not YET involved!) We will continue to provide complex rehab mobility products until further government intervention.”

– Dave Parks is editor of HomeCare Monday and HomeCare magazine.