Question & Answer

Saturday, August 31, 2002

'CB is the only way to raise the quality bar'
SARASOTA, Fla. — While the industry battles a nationwide competitive bidding program on Capitol Hill, one potential bidder is peering over the fence at the possibility of a nationwide roll-out. He doesn't like what he sees, though not necessarily for the same reasons as most industry providers.

At Hoveround, President and CEO Tom Kruse said he's alarmed by proposals that would roll out a competitive bidding program that does not include high accreditation standards and that does not include volume commitments from Medicare.

Consequently, while most of the industry lobbies to defeat proposals to enact nationwide competitive bidding, Kruse is lobbying to ensure that higher provider standards and minimum volume commitments should be part of the program.

"If competitive bidding is the only way to raise the quality bar, then I say, 'Let's do it,'" Kruse said.

Kruse is no stranger to controversy. While his company manufactures power wheelchairs and scooters, Hoveround is also a provider of those products. The JCAHO-accredited company maintains a fleet of 130 vans, more than 100 Rehab Technology Suppliers (RTSs) and services patients in 40 states.

HME: So then you support competitive bidding?

Tom Kruse: I'm in a precarious position here, because I am a member of AAHomecare. I am not for competitive bidding in general. I don't disagree with [AAHomecare] saying we don't as an industry want competitive bidding. What I do disagree on is you just can't blindly say, 'No, no, no,' and not look deeper into the bills that are coming out.

HME: Bills that you think may come to fruition as law?

TK: If it's going to change, which I believe is inevitable, then we better not just run around Washington saying, 'No, no, no, you can't do this.' We can't say, 'You can't ask for the highest quality, and you can't ask for the highest price.'

HME: You've looked at the bills, and you don't like what you see.

TK: When the bills come out and actually have negative quality language in them, saying that the secretary shall ensure that accreditation by JCAHO or any other accredition organization is not required for bidding purposes, it's an abomination. It's a bad deal.

HME: Accreditation, by ACHC or CHAP or JCAHO for example, is expensive. Wouldn't requiring standards of that caliber have a serious impact on small businesses that may run excellent companies but that can't afford accreditation?

TK: For a small business, survey costs are $3,300 every three years. That is a burden, but that same enitity can bill Medicare at $5,000 a pop on products, or $10,000, or whatever.

HME: Competitive bidding could put a lot of companies out of business.

TK: It's too easy for people to be in this business. Would you — because there is a rural, 30-bed hospital, a small business, in Nebraska with a mortality rate of 50% — not put any quality standards on them because they are a small busines entity? Does [the government] allow Joe's Welding Shop to bid on an F-16? We are sitting in the only segment of health care that really doesn't have anything beyond supplier standards to work off. The supplier standards are as basic as you can get. There are more than 100,000 DMEPOS numbers out there. That's a little bit ridiculous.

HME: You also take exception to no volume commitments. Making a volume commitment would also rule out the small provider.

TK: There should be a minimum purchasing agreement that any other contract would have. When the Army wants to buy F-16s, they say I want 350 F-16s. You go to all your vendors and you say, 'Now I'm going to buy X-amount of motors, bolts, seats etc.' You get volume discounts and pricing, and you pass that along in your bid to get the bid. That didn't go over very well in Washington, mostly because of small business protections. That's less of a fight for me, although I think it's ridiculous that they're asking for best price and they're not giving you order No. 1. That doesn't fit into the normal landscape of a government contract. HME