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10 min reading time
Jeffrey Baird, chairman of the Health Care Group at Brown & Fortunato, a Texas-based law firm, represents infusion companies, home medical equipment (HME) companies, and other health care providers throughout the United States.
We were talking about Medtrade (http://medgroup.biz/Medtrade-2014 Atlanta, Oct 20-23), the largest Home Medical Equipment (HME) Expo and Conference in the US, when he told me this enlightening story.
“For the first 12 years of my life, I grew up in a state mental hospital. My father was the hospital’s psychologist, and a cynic.
Dad saw the ridiculousness and hypocrisy in many things. When he observed something bordering on the absurd, he would say, ‘The insane are running the asylum.’
Jeff continues, “That’s how I feel about competitive bidding for four reasons.
# 1 The US Centers for Medicare & Medicaid Services (CMS) instituted competitive bids to reduce the number of suppliers. The goal is NOT to reduce fraud; there are tools in place to accomplish that. The goal is NOT to reduce reimbursement; there are tools in place to accomplish that.
# 2 I’ve seen large HME suppliers – with financials are as strong a bank’s – get disqualified because their financials ‘do not meet’ CMS standards. I’ve seen others – unable to get a car loan from a credit union – be deemed financially qualified.
# 3 I’ve seen HME suppliers bid responsibly only have their bids rejected. I’ve seen others submit suicide bids, be awarded a multiple bids for multiple product lines and have absolutely no ability to honor their obligations.
# 4 Any business (restaurant, sporting goods store, DME supplier) needs a working capital line of credit from the bank.
What bank wants to lend money to a HME supplier with the knowledge the lion’s share of the supplier’s business will be gone in three years if the supplier is not awarded a contract? I’ve heard competitive bidding program officials respond, ‘Well, the HME supplier just needs to move into other product lines.’
That’s absurd. No matter how you slice it, the primary customers for HME industry are old people. When a person reaches 70, his body breaks down. He needs HME and the payor is Medicare. To say the losing bidder just needs to go out and find other customers is ‘Alice in Wonderland.'”
What do you think of Jeff’s comments? Do you have a reimbursement story to help members navigate CMS waters?
Related discussion this week: FDA and Home Use Devices at http://bit.ly/FDA-HME
I was surprised to learn Medtrade admission is free! You can walk the floor of the expo at no cost. (There is a charge for the educational sessions.)
If you can make the trip to Atlanta, let’s try to meet in person.
Register online at http://medgroup.biz/Medtrade-2014 with code MTEXPO for the free Expo Pass.
WHITE HOUSE VISIT
10x speaker Eric Rasmussen flies on Thursday to a White House meeting about improving the safety of healthcare workers treating Ebola patients in West Africa.
He wants to bring the Group’s ideas with him. Please leave your comment today at http://bit.ly/WH-ebola
I’ll share Eric’s 10x presentation in the next few weeks.
Discussions This Week
One question for Hillary Clinton at AdvaMed
Becton Dickinson to buy CareFusion for $12 Billion
FDA on Cyber Security
FDA submission for Class I
Make it a great week.
P.S. Free webinar on Biocompatibility:ISO 10993 and ISO 14971.
Stephanie Beth Skaggs
Thank you all for your thoughtful comments! I am going to send this conversation trail to lawmakers.
Remember, the original Medicare concept wasn’t for 50,000,000 people. The country wasn’t projected to expand with ALL the immigration we have and continue to have within the program.
C. Angelique Steccato
I agree the real purpose, or at least the real effect, will be to reduce the number of DME suppliers. It drives business to the large internet consolidators, and to healthcare providers such as hospitals to provide in-house DME services.
Burrell (Bo) Clawson
Kevin T. S. Riley
Bidding rarely yields the best result for any of the stakeholders….
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