NewsPoll: Providers bid on the tried and true

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Friday, April 13, 2012

YARMOUTH, Maine – Most providers who submitted bids in Round 2 stuck close to home, according to the latest HME NewsPoll.

Although 81% of poll respondents submitted bids, only 40% bid in competitive bid areas (CBAs) that they do not currently serve.

One of the providers in that 40% is Curtis Saxton, who currently serves skilled nursing facilities in two CBAs but not Medicare patients. He submitted bids as a way to potentially expand his Medicare business.

"We placed good margin bids and will be glad to add these counties to our service area if awarded the contract," said Saxton, owner of Butte Therapy Systems.

The bidding window for Round 2 closed March 30. Providers submitted bids for nine categories in 91 CBAs.

Some providers report that out-of-area bidders forced their hand when it came to submitting bids.

"Because there were so many out-of-area providers bidding in my MSA, I decided to bid lower than what I intended," said one provider. "Because of the way this flawed program is put together, you have to bid low enough to get in the glass before capacity is met."

Other providers say they'll give up Medicare, rather than risk hurting their business.

"We are in a Round 2 bidding area; however, I decided to take the company in a different direction and did not bid," said one provider. "A flawed bidding process is a flawed business model."

Most providers—82%—also stuck to the products they currently offer, rather than submitting bids for new product categories.

Other providers, like Daryl Bowman decided to cover all the bases.

"I submitted a bid in every category," said Daryl Bowman, CEO of Bowman Medical Supply in San Carlos, Calif. "I don't expect to get an offer unless I am included as a small supplier. If not, I may still be able to work with winning bidders."
Competitive bidding has also caused providers to rethink the products they currently offer to Medicare beneficiaries. Some products simply aren't feasible under what they expect to be much lower reimbursement in bid areas.

"We supply enteral food but did not bid on it because we felt the price of freight would be unacceptable as the price of energy keeps going up," said David Daniel, CEO of Medi-Serv.

Comments

We are Small HME and we are in Fl. We did not win any categories. (1st Round). After that, we decided to   elliminate some offices and open a retail showroom (1200'), Our Medline Sales Rep said at that time "good move"  Thank God, we survived a BID phenomenon. I know, some Hme who won they had to closed the doors.   High costs, low payments

My point is , We have to think very carefully about the Re-compete. Now, we have the experience.  If, some one would like to see our showroom , we are in  Facebook, Jairos Medical Equipment, follow us in Twitter, our website is www.jairosmedical.com, Google, Manta, Yellow Pages, all kind of media we can use , we are going to use. We have to diversified our services and we want still on the field.  Thank you HME.        

Emilsa Lopez, Pres.