Home Health & Hospice Week

Expect reimbursement cuts of 20% or more.

If you're a supplier of home medical equipment near a city, expect lower reimbursement starting the summer of 2009.

That was the message from the Centers for Medicare & Medicaid Services as it announced the next phase of competitive bidding for HME during a Jan. 8 conference call.

Exceptions: Most large metropolitan areas remaining were selected for phase two, with the exception of Boston, Washington, DC, Philadelphia and Baltimore, MD.

This summer: Suppliers in the 10 competitive bidding areas included in phase one of competitive bidding will see prices drop for nine product categories starting July 2008. A 10th category, support surfaces, will be affected for suppliers in Miami and San Juan, Puerto Rico.

The impact of competitive bidding on small players will become clearer once contracts are awarded this spring, but stakeholders are concerned.

A caller to the conference call sponsored by CMS asked about the likely impact on small businesses.

"There are other markets besides Medicare," said Kerry Weems, CMS acting administrator, in response. CMS estimates that pricing overall will fall about 20 percent, though the cuts will be steeper for some products.

Next summer: CMS selected 70 areas for phase two of competitive bidding.