Longtime diabetes supplier closes shop

When Howard Rich closed his business on May 24, he closed the door on 22 years of serving the tri-county area of Fort Lauderdale-Palm Beach-Miami-Dade, Fla. The founder of Diabetic Care Network survived Round 1 of competitive bidding, only to fall under the national mail-order program, which kicks off July 1. Rich spoke with HME News about the slow downhill fall of his company.

HME News: How big was Diabetic Care Network?

Howard Rich: We built it up to 8,000 or 9,000 patients. At one time, we had 22 employees. In 2011, we were the No. 1 provider in the tri-county area. We had close relationships with the doctors because we trained people on the monitors—no one else did that at the time.

HME: You lost about 30% of your business in the first round of competitive bidding?

Rich: CMS sent out a letter to everybody's patients that said, “You must buy from these companies; the other companies are fraudulent.” It was a nasty letter. Then the delay came. For the first few weeks of July (2008) we didn't get paid anything but we were able to hold on. But because of all that, we lost close to 4,000 patients and got back only 2,000.

HME: How did you remain in business at that point?

Rich: Even though we didn't get the bid, we were still able to deliver to the patients. I personally delivered. After 18 years (in the office), I figured I'd get to know the people again. That's how we were able to stay open the last three years.

HME: What has the closing process been like?

Rich: We gave our remaining 1,800 patients to one of the contract suppliers. We had a big layoff in December and again on April 15—all told about 15 people. My people have worked here between eight and 22 years. All are in their 60s and one was 81.

HME: What are your future plans?

Rich: I am 62. I have to come up with something. I don't think I am ever going to do anything with Medicare again. It's a losing proposition.