Home Health & Hospice Week

Suppliers play catch-up as deadline for comments approaches.

If you're looking for answers about how competitive bidding will affect you as a supplier of durable medical equipment, don't hold your breath.

That's the message the Centers for Medicare & Medicaid Services delivered at a special Open Door Forum held on the topic May 23. Billed as an opportunity for dialogue and clarification on the bidding proposed rule, the forum left listeners struggling to hear anything that was said. During the 90-minute forum, only callers' questions were clearly audible. 

Background: Federal officials published a proposed rule in the Federal Register May 1 that offers an outline of how CMS plans to structure competitive bidding for the provision of durable medical equipment, prosthetics and orthotics and supplies under Medicare, with the start of implementation slated for 2007 (see Eli's HCW, Vol. XV, No. 17). But the rule offers little detail.

The agency, for example, notes that it will select 10 large metropolitan areas but does not name the areas. Nor does the rule say if the program will be implemented simultaneously in the areas selected or if implementation will be staggered, notes John Gallagher, vice president of government relations for the VGM Group in Waterloo, IA.

Get Your Head In The Game

Providers should not take a wait-and-see ap-proach to competitive bidding, warns Wallace Weeks of the Weeks Group Inc. in Melbourne, FL. Many--particularly smaller providers--are already lagging in the race to prepare for competitive bidding, he says.

"I know of only a handful of companies that are currently prepared," says Weeks, speaking of providers' inability to track with accuracy the costs of goods and services related to specific HCPCS codes.

Red flag: A number of callers to the ODF seemed to be sketchy on even the most basic questions of how competitive bidding will affect their businesses. Several, for example, asked how suppliers of customized prosthetics and orthotics would be affected, even though the rule clearly states that competitive bidding would apply only to "off the shelf" products in those categories.

Start Strong To Succeed

With the June 30 deadline for submitting comments to CMS approaching, providers should get up to speed quickly, Weeks urges.

Required reading: If you're just digging in, don't miss these key sections and proposals:

• Definitions. The rule spells out just what it means by terms such as "grandfathered supplier" and "pivotal bid." (See "Provisions of the Proposed Reg-ulation," starting on page 8 in the PDF copy of the rule as published in the Federal Register.)

• Networking. The MMA calls on CMS to ensure that small providers have the opportunity to take part in bidding. In the proposed rule, the agency suggests allowing smaller suppliers to form networks that bolster their ability to compete. Networks would need to be a legal entity, such as a joint venture or contractor/ subcontractor relationship. (See "Opportunity For Networks," beginning on page 31 of the PDF rule.)

• Quality standards. CMS has yet to name the groups responsible for accrediting suppliers, but accreditation will be key. (See "Conditions For Medicare Pay-ment," beginning on page 50 of the PDF document.)

• Metropolitan areas affected. CMS hasn't said which MSAs will be selected, but there are clues. "The methodology for selection is fairly revealing and should get diligent providers close to the initial list," coaches Weeks.

Top contenders based on 2003 data are Miami; Riverside, CA; Pittsburgh; Cincinnati; Houston; Dallas; Charlotte, NC; Orlando, FL; San Juan, Puerto Rico; Atlanta; San Antonio, TX; Tampa, FL; Kansas City, MO; Virginia Beach, VA; St. Louis; San Francisco; Cleveland; Detroit; Baltimore; Philadelphia; Washing-ton, DC and Boston. (See "Section A: Purpose and Definitions" on page 8 in the PDF document). 

Note: The proposed rule PDF is online at www.access.gpo.gov/su_docs/fedreg/a060501c.html.