ATLANTA--Competitive bidding and accreditation have dominated the industry's headlines in 2008, but HME's newest concern might be related to pressure at the pump.
Providers are worried about skyrocketing gas prices, and a disturbing new trend that has surfaced with them.
Last week, a report from ABC's Salt Lake City affiliate detailed a robbery at Alpine Home Medical, where the provider was hit for more than 100 gallons of gas.
The thieves wreaked havoc on the fleet at Alpine--owned by Jay Broadbent, vice president of Utah's state HME association--damaging three trucks by drilling into their tanks and slashing fuel lines. The results were delayed deliveries, many of which were made from Alpine staff members' personal vehicles as the company's trucks were no longer drivable, employees told ABC 4.
While the HME robbery remains an isolated incident for this industry, similar cases in which the thieves drilled into vehicle tanks have been reported in a number of the country's major metro areas.
So far, however, the nation's providers seem more concerned about their own fuel pinch.
One provider who has been forced to cut costs is Bob Sherman, president of the Big Sky Association of Medical Equipment Suppliers and a respiratory therapist at Valley Medical Supply in Stevensville, Mont.
Sherman said Valley Medical, which sometimes has to drive up to 100 miles in one direction to provide for its patients, has already had to modify operations because of rising fuel costs.
”We've cut down on unnecessary visits,” Sherman said. “We've made a few changes like that. We've had to move our concentrator checks to every six months, and we used to do them monthly. We might have to [move them] to every year … You can't drive 100 miles one way for one person for $77 a month.”
Predictions that gas prices could top $4 per gallon by summer is more bad news, especially for providers who placed bids in round one, according to Walt Gorski, vice president, government relations, for the American Association for Homecare.
“When this [gas pricing] issue was raised, CMS said any contingent for price increases would have to be included in the CPI,” Gorski said, explaining that round one bidders were expected to factor in gas prices to their bids. But he wondered how a provider was supposed to account for the fluctuation in prices, especially since the CMS contracts last for three years.
“It is virtually impossible for suppliers to have the crystal ball that CMS wants them to have,” he said. Providers who won bids based on gas prices in June 2007 are now facing a very different cost environment.
While his area was not selected as a competitive bidding MSA, Sherman said he would not bid even if it had been.
“We wouldn't bid. Not under the current rules. There is
absolutely no way. And a lot of that comes down to gas,”
Sherman said. “I'm not going to be able to invest in my
business [for accreditation and other operating expenses] when gas
might go up to $7 in the next three years and I am locked in at
that bid price.”