Impact of Competitve Bidding Reported

Check out this survey reported on in HMENews. Patient access to diabetic supplies and patient choice has been drastically impacted by Competitive Bidding. Sadly, the results of this survey don't come as a surprise to many in our industry, but we're glad these groups have taken the time to bring this information to the forefront.

Survey: Bidding program really does limit access By Theresa Flaherty, Managing Editor 12.23.2011 CHICAGO - Beneficiaries in Round 1 competitive bid areas have limited access to the most widely used diabetes testing supplies, says the American Association of Diabetes Educators (AADE). A survey by the association found that mail order contract suppliers, on average, offered only 38% of the product brands that are listed on www.medicare.gov. Of the nine brands identified by the Office of Inspector General in a 2010 report as the top mail order brands by market share, contractor suppliers offered, on average, only 1.44 of the brands, or 16%. "We were getting all of these stories from our educators who were hearing about problems, or having their patients tell them they don't have a certain meter any more," said Martha Rinker, chief advocacy officer for the AADE. "When we talked to CMS about it, or any other party, they'd say it was just anecdotal. We thought this was the best way to get concrete information." With an average reimbursement cut of 56% for mail order diabetes supplies, it's not all that surprising that many suppliers are offering lesser-known--and less expensive--brands. Dr. Peter Cramton, a vocal critic of the current competitive bidding program, predicted providers would cherry pick and switch patients to different brands to try and squeeze out a profit. "It's in line with what I expected to see based on the current design of the program and the type of behavior it creates," said Tom Milam, a member of the Program Advisory and Oversight Committee (PAOC) and former CEO of mail-order diabetes supply firm AmMed Direct. For Round 2, which expands the mail order diabetes bid to all 50 states and several U.S. territories, CMS has implemented changes it believes will prevent low-ball bids: Contract winners must provide, at minimum, 50% of all the different types of diabetes testing supplies on the market by brand names; and contract winners are prohibited from influencing or providing incentives to beneficiaries to switch their brands. But unless CMS plans to police suppliers, stakeholders don't believe the provisions will work. "It's easy to bid and give a low bid and say you're going to do something and not do it," said Rinker. "I think it's going to be up to us who work with the patient community to get some congressional interest in this to make CMS take an interest."

Article from HMENews http://www.hmenews.com/?p=article&id=hm201112nviNI0

Impact of Competitive Bidding Spreads

The following article was featured in HME News this week. Although this publication is directed to home medical equipment providers, the message below needs to be heard by equipment users. Competitive bidding's impact spreads This is the first indication of a rate reduction based on the bid By Liz Beaulieu Editor FRANKLIN, Tenn. – If you still think competitive bidding doesn't affect you because you're not in a Round 1 or Round 2 CBA, here's a wakeup call. HealthSpring, which owns and operates Medicare Advantage plans in 11 states and Washington, D.C., notified its contracted DME providers in an April 6 letter that it plans to adjust its rates based on the new competitive bidding rates. The kicker: The company states that "this is a corporate initiative to standardize our DME fee schedules across all states and markets." "This is the first indication of a rate reduction based on the bid," said Michael Hamilton, executive director of the Alabama Durable Medical Equipment Association, whose members were among those who received the letter. "This is a shot across the bow." In its letter, HealthSpring explains that the new competitive bidding rates represent 68% of the current Medicare allowable. As such, it plans to reduce its rates to 70% of the allowable, down from 80%. The news came as a surprise to Mobilcare Medical. The Theodore, Ala.-based provider thought the changes were specific to Alabama, where it's not a contract provider for HealthSpring. But it is in Tennessee, one of the other states where the company operates plans. "I can't believe they're going to use competitive bid rates," said Tony Tice, vice president. "Their rates are already low." In its letter, HealthSpring asks providers to notify them in writing whether they accept or decline the change. Wetumka, Ala.-based Quality Home Healthcare, a contract provider for HealthSpring in Alabama, plans to tell the company thanks but no thanks. "We were happy to see HealthSpring come to our area because we liked that they did prior authorizations—it made things easy," said Susan Czapla, president. "But we're not going to accept this reduced rate." While several Medicaid programs have threatened to adopt the new competitive bidding rates, none have to date, so industry stakeholders fear HealthSpring will set a dangerous precedent for other payers. "This is quickly becoming a race to the bottom," said Walt Gorski, vice president of government affairs for AAHomecare. "That's why we have a golden opportunity with H.R. 1041 (a bill that would repeal competitive bidding). That's why we can't squander it." In addition to Alabama, Tennessee and Washington, D.C., HealthSpring operates plans in Delaware, Florida, Georgia, Illinois, Maryland, Mississippi, New Jersey, Pennsylvania and Texas. Consumers need to be aware of changes in the industry. Although a beneficiary might not be in the current competitive bid areas, this article shows that insurance companies, Medicaid plans and Medicare Advantage plans intend to follow the flawed rules of Medicare. What does this mean for you? If your medical coverage begins to reimburse based on Medicare's Competitive bidding rates your access to needed medical equipment will be affected as fewer and fewer providers will be able to accept the low rates. Those accepting the rates will likely be able to do so by providing lower quality equipment. The quality of care medical equipment providers will be able to extend to their customers will, no doubt, be negatively affected as well.

Medicare: What you don't know WILL make you sick Part 2

The most serious issue facing the home medical equipment industry right now is competitive bidding. In its current form, it will have a devastating effect on both medical equipment providers and their patients -- our parents, grandparents and other loved ones.

A study commissioned by VGM concluded that CB will have a horrible effect on rural areas, which is the opposite of what CMS has been telling lawmakers and the medical equipment industry.
This study, as well as some interviews with individuals who use HME and related services, is the basis for VGM TV’s first show, “Medicare: What You Don’t Know WILL Make You Sick."

Click here to view Part 2 and learn the potential impact Competitive Bidding could have on our rural communities.

Medicare: What you don't know WILL make you sick Part 1

 The most serious issue facing the home medical equipment industry right now is competitive bidding. In its current form, it will have a devastating effect on both medical equipment providers and their patients -- our parents, grandparents and other loved ones.  A study commissioned by VGM concluded that CB will have a horrible effect on rural areas, which is the opposite of what CMS has been telling lawmakers and the medical equipment  industry. This study, as well as some interviews with individuals who use HME and related services, is the basis for VGM TV's first show, "Medicare: What You Don't Know WILL Make You Sick," View part 1 of VGM TV's Medicare: What You Don't Know WILL Make You Sick.