Legislation Competitive Bidding Arises in Florida Budget: Florida's Medicaid agency, the Agency for Health Care Administration, has a budget calling for


Competitive Bidding Arises in Florida Budget: Florida's
Medicaid agency, the Agency for Health Care Administration, has a
budget calling for a pilot program to test DME capitative
competitive bidding. The proviso language requires “that we
do a competitive procurement for a demonstration capitated DME
program,” said Connie Ruggles, a senior management analyst at
AHCA's Medicaid office.

Although the program's structure has yet to be determined, the
agency's request for proposal will be for organizations interested
in bidding as a contractor for the plan. The selected company will
receive a per member, per month fee to provide all DME services for
Medicaid recipients in a “demonstration” geographic
area yet to be determined. The capitated rate will be no more than
80 percent of the current Medicaid fee for service per member per

The proviso excludes customized wheelchairs, prosthetics, ostomy
and colostomy supplies. Such items will continue to be paid on a
fee-for-service basis.

Outside these exclusions, the selected company would have to
“provide quality service to everyone that gets DME service
[in the area] and they have to do it at a 20 percent
savings,” Ruggles explained. The state plans to implement the
program in early 2004.

Earlier this year, a lawsuit filed by the Florida Association of
Medical Equipment Services successfully blocked the AHCA from
implementing statewide competitive bidding for hospital beds and
respiratory equipment and services.

“After we won our lawsuit, this is what they come back
with. We're getting together with the parties that will be
affected” to discuss options, said Joan Cross, president of
FAMES and C&C Homecare in Bradenton, Fla.

CAMPS Provides Alternatives to DME Cuts: Working to
mitigate the possible negative effects of California's new budget,
the California Association of Medical Product Suppliers has
proposed alternatives to the budget's deep cuts in reimbursements
for “unlisted items.” First, CAMPS suggested a rule
that would require home medical equipment providers to pursue
initial denials from Medicare before billing Medi-Cal. Second,
CAMPS proposed a tiered reduction of reimbursements, ranging from 5
percent to 10 percent off the manufacturer's suggested retail price
for manual and power wheelchairs. Third, CAMPS said that Medi-Cal
should require that providers become certified technicians before
dispensing custom rehab equipment. More information about the
association's lobbying efforts is available at www.campsone.org.

NY Providers Fight Cuts for Dual-Eligibles: In its
2003-04 state budget, the New York legislature only partially
restored funding for a Medicaid program that reimburses health care
providers, medical equipment companies and pharmacies for
co-insurance costs associated with beneficiaries eligible for both
Medicaid and Medicare. But since July 1, the state has yet to
implement the cuts because of arguments over how to interpret the

“Originally, the legislation reduced the copay to 20
percent of the 20 percent” co-insurance cost, said Jackie
Negri, executive director of the New York Medical Equipment
Providers Association, “so, essentially, it represents a 16
percent cut.”

For example, if a DME product costs $100, Medicare will pay $80.
The state's Medicaid program will now reimburse only $4 of the
remaining $20, leaving $16 for the provider to absorb.

Over the summer, NYMEP communicated with lawmakers about
specific application of the language and has come to agreement with
New York's Department of Health that the cuts would take effect
only when the Medicare paid amount is higher than the Medicaid
amount. Providers would pay for the cut in Medicaid reimbursement
retroactively to July 1, although how such repayment would occur
remains unresolved.

NYMEP plans to continue its political battle seeking a full
repeal of the law. “A 16 percent cut is just not feasible for
DME providers,” Negri said. “They will not be able to
continue to service those in need.”

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of the home medical equipment industry.