Home Health & Hospice Week

Hint: Focus on these 3 key factors.

If you're waiting for a final rule before you hunker down for competitive bidding, think again.

The longer you delay your planning, the bigger risks you may face under Medicare's coming new method of paying for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS)--and the feds are taking their time in issuing a final rule.

First the feds said "fall," then "end of the year," and now it's "spring," says Maryanne Popovich of the Joint Commission (formerly the Joint Commission on Accreditation of Healthcare Organizations), referring to a string of projections about when the Centers for Medicare & Medicaid Services would unveil the final reg.

"It's still anyone's guess" when suppliers will see the rule, allows Popovich.

Reality check: But a delay in publishing a final rule does not mean CMS will postpone the program. And as the calendar pages flip, experts are strengthening their call to be proactive, not reactive, in the days leading up to competitive bidding.

The new market is "literally around the corner," said Miriam Lieber of Miriam L. Lieber Consulting in California, speaking Feb. 15 at an American Association of Homecare teleconference on the topic.

Lieber and others counsel suppliers to proceed by taking steps to make sure their businesses are running at top efficiency, a move that makes sense regardless of how Medicare pays for supplies.

Inspect Your Strengths--And Weaknesses

"This is an opportune time to take a look at your operation to see how you can home in on efficiencies," said Lieber.

To focus your streamlining efforts, consider what is known about competitive bidding so far.

1. Competitive bidding will affect your business, sooner or later, one way or another. Putting off preparations can put your business at risk.

Big mistake: Do not assume that these circum-stances insulate you from change:

• You are not in one of the metropolitan statistical areas (MSAs) ultimately chosen in the first round of competitive bidding;

• You are in a rural area that won't be affected;

• You deal in a product that's not likely to be included in Phase One.

Even if those "maybes" apply to you, it's wise to arm yourself with as much knowledge as possible about competitive bidding, starting now, says Wayne Link of the North Carolina-based Link Consulting Group.

Incentive: As companies gear up for competitive bidding, competition in general will heat up. And other payers, including additional Medicaid programs, may follow Medicare's foray into competitive bidding.

Whether you wind up seeking a contract--or selling your company because you decide it won't be profitable to contend with the new market realities--you'll want your business to be running at top efficiency to maximize returns, said Lieber.

Tip: It's not where your business resides but where your patients are that counts to Medicare. If a significant percentage of your business comes from a large metropolitan area, chances are competitive bidding will be a reality for you within the next year or two.

"You can't be totally ready, but have your ducks in a row," said Lieber.

2. The bidding process itself will be time-consuming. The final rule may not be out yet, but CMS has released a draft of Form B, which suppliers will use to bid for Medicare contracts. The agency also has released related forms, but Form B is the longest and "most arduous," cautioned Lieber. She advised suppliers to look at it now to get a realistic idea of "all the legwork you will have to do just to say you want to bid."

Time is money: CMS estimates it will take suppliers about 14 hours to complete the form, but experts suggest a bigger time commitment.

Tip: Don't neglect to account for the cost of bidding when you calculate your bid.

To review the form--a first step in getting a handle on the costs involved--go to www.cms.hhs.gov/CompetiveAcqforDMEPOS/downloads/CMS-10169B.pdf.

3. Phase-in will be fast. Don't be misled by the "hurry up and wait" lead in to competitive bidding, cautions Popovich.

The Medicare Modernization Act of 2003, which calls for the competitive bidding of home medical equipment, spells out a specific timeframe for the rollout--and there's no time to spare. CMS is bound by statute to get competitive bidding rolling in 2007.