Home Health & Hospice Week

Outraged trade groups plan legal action.

Suppliers nationwide are catching a glimpse of their Medicare future, and it looks bleak.

The Centers for Medicare & Medicaid Services sent out round one competitive bidding contract offers March 20. Round one will take place in 10 cities and will begin July 1. Round two will expand to 70 more metro areas and is scheduled for summer 2009.

Round one bidding for durable medical equipment will cut Medicare spending 26 percent on bid items, CMS Acting Administrator Kerry Weems said in announcing the payment amounts.

The amounts range from 14 percent less than current reimbursement for negative pressure wound therapy devices and accessories to up to as much as 43 percent on mail-order diabetic supplies, notes Competitive Bidding Implementation Contractor (CBIC) Palmetto GBA. (For a list of round one bid payment amounts by competitive bidding area, go to www.dmecompetitivebid.com/SPA.)

The lower prices will result in lower out-of-pocket expenses for Medicare beneficiaries too, CMS stressed in its announcement.

Suppliers receiving bid offers had 10 days to accept or decline the contract, notes the American Association for Homecare. AAHomecare asked CMS for an extension on the acceptance window, but at press time CMS had not granted that request.

Suppliers who didn't win contracts received letters of non-acceptance.

CMS will announce the final suppliers who accepted bid contracts once all the contracts are "executed," it says. That will probably be in May, AAHomecare expects.

Disaster: "The costs savings that CMS predicted ... for round one gloss over serious issues of patient access to care, quality of service for Medicare beneficiaries, and the cost of limiting patient choice in the DME marketplace," AAHomecare insists in a release. "The reality is that the bidding program is a severe cut to the DME industry on top of numerous other reductions."

"No one should be satisfied with the outcome of the bidding process, neither bid winners nor losers," maintains Wayne Stanfield of the National Association of Independent Medical Equipment Suppliers. "It is clear that the impact of this ill-conceived program will be devastating to Medicare beneficiaries and suppliers," NAIMES says in a release.

"Some of the most seriously ill and disabled Medicare patients in Southwestern Pennsylvania will be profoundly affected by this ill-considered program," says John Shirvinsky of the Pennsylvania Association for Medical Equipment Suppliers. "Competitive bidding will greatly reduce the number of providers who can serve Medicare beneficiaries and will eliminate community-based suppliers for many." Pittsburgh is among the round one CBAs.

Round one bidding will result in more than 2,600 full-time jobs lost in the DME sector, predicts The Weeks Group in Melbourne, FL. For round two, that figure skyrockets to more than 14,000 jobs cut, AAHomecare reports.

Suppliers who don't win bid contracts are at high risk of going [...]