HME Providers Look for Escape, "Just take my business over"

Adapted from HME News, HME Providers Look For Escape, by Leah Hoenen; Friday, April 25, 2014

We have blogged many times about Competitive Bidding for the HME/DME (Home Medical Equipment/Durable Medical Equipment) Industry.  (The Centers for Medicare & Medicaid Services (CMS) Medicare Prescription Drug, Improvement, and Modernization Act of 200, effectively known as H.R. 6331, or simply, Competitive Bidding)

Medicare Competitive Bidding and What it Means For the Consumer

We at Mountain View Medical Supply are a small, family owned and operated business and cannot competitively bid against the likes of CVS or Walgreens, so we made the decision to exit the Medicare/Medicaid provider program in 2009.  You see, the government Competitive Bidding program was tailored for large scale providers with many branch locations, so the mom-and-pop providers who couldn't compete or win bids, are struggling to survive.  As a result, some HME providers are asking other providers to purchase their businesses.  

"If CMS wanted to tear the industry apart and take the 'mom and pop' out of it, this bid has been successful," said Terry Luft, a vice chairman at Harrisbug, PA-based Dynamic Healthcare Services (DHS).  In April, DHS completed its third buy of this year, and after an acquisition is publicized, the company often receives several phone calls from other companies looking for an exit strategy, he said.  

In June 2011, Homecaremag.com took a poll asking providers, "Will you bid in Round 2 of Competitive Bidding?"  A shocking 60 percent of HME participants said they are trying to sell or close their HME businesses before Round 2 of competitive bidding.

Majority of Providers Want Out

Our HME/DME industry as a whole has been very vocal with Competitive Bidding concerns in Washington D.C., but not only did CMS continue with Round 2 bidding, a re-bid of Round 1 was launched in the first quarter of this year.  It is now clear that if Competitive Bidding has not reached your area, it is coming soon for those who have to go through Medicare/Medicaid for HME/DME.  

For those who can pay out of pocket, visit your local mom and pop shop!  Mountain View Medical Supply is one of the "lucky ones" who diversified by adding a second business (Laurel Uniforms & Apparel).  And even though it has benefited our business somewhat, it saddens us that several of our competitors have closed their doors in the Denver Metro area.  

"President Obama is committed to helping America’s small businesses grow and prosper." - The White House 

Majority of Providers Want Out

Are you or someone you love a Medicare recipient? If so, you need to know this!

Homecaremag.com conducted a poll: "Will you bid in Round 2 of competitive bidding?"

A shocking 60 percent of Home Medical Equipment (HME) participants in HomeCare's March web poll said they are trying to sell or close their HME businesses before Round 2 of competitive bidding.

Here is how the responses broke out:
Yes: 13%
No: 10%
Haven't decided: 4%
Audits may put me out of business before Round 2 is implemented: 13%
I'm trying to sell/close my business before I have to: 60%

Here is a Competitive Bidding overview, courtesy of www.homecaremag.com:
The original DME competitive bidding program was signed into law on December 8, 2003, as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). In April 2007, the Centers for Medicare & Medicaid Services (CMS) announced the Medicare DMEPOS national competitive bidding program final rule and the first-round competitive bid areas and product categories.

After numerous problems were encountered during Round 1 of competitive bidding, the House and Senate voted in July 2008 to overturn President George W. Bush's veto of H.R. 6331. The Medicare package included a temporary delay of the DMEPOS competitive bidding program to allow time for critical process improvements and other reforms to bidding and HME policy. (View a summary of the competitive bidding provisions in H.R. 6331.)

During President Bush's last month in office, his administration issued an interim final rule that instructed CMS to restart the competitive bidding process, which is now commonly known as the Round 1 Rebid. The newly-elected President Barack Obama temporarily delayed all rules issued during the previous administration's final month, but this rule was allowed to become final after the 60-day delay expired in April 2009.

In August 2009, CMS announced the timeline for the Round 1 Rebid. (View a timeline with deadlines for competitive bidding.) On October 13, 2009, Rep. Kendrick Meek, D-Fla., introduced a bill to repeal DMEPOS competitive bidding. However, CMS opened the 60-day bid window on time for the Round 1 rebid of Medicare DMEPOS competitive bidding.

•Visit the CBIC Web site for further information on the Round 1 rebid.
•Read an overview of Medicare's DMEPOS Competitive Bidding on CMS' Web site.
•View the final rule on the Competitive Acquisition for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).

Click our previous post Medicare Competitive Bidding and What it Means to You for more information.