Re: Medicare Competitive Bidding

[Guest guest]

Thanks Bruce. Good info. we all need to be aware of.

Tomorrow is our big PNW gathering. I'm so anxious to see them face to face!

MamaSher, age 69. IPF 3-06, OR.Don't fret about tomorrow, God is already there!

Medicare Competitive Bidding

Most of you are probably aware that the Medicare Competitive Biddingprogram is in process of implementation. This program goes into effectin ten markets in July (mine included) and 70 markets in 2009 andadditional areas after. Now for a bit of what that means to each of us.Well, the bids are 26% less than medicare was paying. This means yoursupplier will get 26% less than before when this hits your area. I dobelieve it is logical they will cut corners and service willdeteriorate. Furthermore, they may balk at providing things they havebeen providing. I'll speak of rumors later in that regard.The second impact will be providers going out of business. Of thehundreds of vendors in the DFW area providing oxygen or relatedequipment only 35 got contracts. The others can grandfather patients butcan't accept new medicare patients. You cannot stay in business withoutMedicare patients as depending on the supplier they are anywhere from70-98% of all business.The third impact is that you may have to use more suppliers fordifferent items. For instance one company may be an approved bidder foroxygen but not CPAP so you may get it from someone different.The final impact is that forcing the customers into fewer companies thatare not yet prepared to handle them will negatively impact service.Now much of this is still to shake out and those of us in the guinea pigmarkets will have to let you know as it happens.Here are some of the behind the scene rumors. The rumor is that smallcompanies who were bid winners can't possibly handle the business so arelooking to sub contract to some of the losers. Now at the lower rates Idon't see that as survivable for long.Second rumor is that Apria is getting out of the liquid business atleast in this market. That they will not provide it with customers goingelsewhere or them subcontracting it or something. This same rumor saysthey are sorry they won the bid but that makes no sense at all.Whatever, this is rumored to be shaking them up in many ways.Third rumor involves Lincare. Lincare did not get selected in thismarket nor in several other markets. Now they aren't going to foregothat business. So it is believed they have acquisitions already inplace.Fourth rumor involves patients switching providers. The new providersare discouraging and even turning them down as they don't want to belocked in to existing situations apparently prior to July and maybe notafter. This all involves the equipment ownership turning over to thepatient after 36 months and the providers want to get all 36 months ifthey have to do that. Some companies seem to have a rule that if you'vebeen on medicare 18 months then they will not take you. This becomesimportant in choosing the best supplier you can find early.Clearly the amount payed to providers is decreasing. Its highly likelyservice will decline. Suppliers will go out of business. Industryconsolidation will continue. There are many protests and lawsuitsalready underway as in some areas the winning suppliers just can'thandle it. For instance, can the powerchairs and scooters be providedand serviced if The Scooter Store is out of the picture in a market?So, the final answers are to be determined but as long as Congressbelieves Medicare pays too much these problems will continue. Now, lookat what they pay your doctor and see if you think its too much.Now for last month Medicare approved $231.07 for my provider and paid$184.86. For that I had a large reservoir, I got a small reservoir formy trip, I had a Helios Marathon and I get my reservoirs refilled weeklywith a normal use of 400-500 pounds of liquid oxygen per month and I get24/7/365 maintenance and emergency service. Now, not knowing my specificreduction but taking the average savings change that to a total paymentof $171 dollars for 4.3 deliveries per month, 450 pounds of liquidoxygen, $3000 or so worth of equipment on loan (ultimately become mineafter 36 months), and 24/7/365 emergency service. This doesn't excusethose who provide bad service as my supplier provides great service.However, it does say that our suppliers face some problems and if theyface problems, we face them.