N.C. considers comp. bidding

Friday, May 31, 2002

RALEIGH, N.C. - After showing up in President Bush's federal budget, and in the Florida Medicaid program, competitive bidding has spread to North Carolina and could be poised for broader dissemination.

To help erase an $800 million budget deficit, North Carolina has proposed implementing competitive bidding for home medical equipment, infusion therapy and home healthcare supplies.

"The state budget in North Carolina is a deficit, and the government, is looking to make cuts wherever it can," said Clark Robichaux, vice president of the North Carolina Association of Medical Equipment Services (NCAMES) "We are sympathetic, but we want the cuts to be proportional."

The Tarheel state is hardly unique in its bleak budget outlook, and other states will most likely look at the dreaded reimbursement cut as a way to close their fiscal shortfalls, said Asela Cuervo, senior vice president of governmental relations at AAHomecare.

Theoretically, to legislators and bureaucrats, competitive bidding seems like a remedy. To combat it, state associations must reach out to and educate state representatives, pointing out that competitive bidding will drive some providers out of business and in turn decrease patient choice, Cuervo said.

NCAMES are doing just that, said Executive Director Beth Bowen.

Last month, NCAMES members meet with pharmacy, home heath and hospice associations to formulate a strategy for thwarting competitive bidding.

"We don't know if we can derail it, but we are hoping to at least delay it until we can educate lawmakers about what competitive bidding means, how it will affect service," said Robichaux said. "Most legislators, when they hear oxygen, think of little green bottles. They don't know what goes along with it."

The North Carolina Division of Medical Assistance (DMA) expects to issue an RFP sometime in October, Bowen said.

In 1997, NCAMES turned back a proposal for competitive bidding by sitting down with state officials and making adjustments to the fee schedule that saved North Carolina about $1 million, Bowen said.

The same strategy could work again - in all, the state wants to trim its HME budget by $690,000, and that could be done easily by adjusting the fee schedule, Robichaux said.

The DMA begs to differ.

Alan Gambill, DMA's assistant director of financial operations, said the state sees competitive bidding as the best way to get the best prices without cutting service. It also will reduce the division's operating costs by decreasing the number of providers it has to deal with, which an across the board fee cut wouldn't do, " he said.

"You only have three things in the tool bag to control Medicaid: eligibly, what services you provide and how much you pay," Gambill said. "I don't want to cut eligibility or the service. That only leaves one alternative." HME