Time to Hedge

• By David Kopf
• Apr 09, 2008

Fight the good fight when it comes to competitive bidding, but play it smart.

During a brisk, windy mid-March week in Washington D.C., more than 350 individuals representing the HME industry rolled into town ready to fight for their businesses.

They were there for AAHomecare’s annual Legislative Conference, held at the L’Enfant Plaza hotel, which, while very accommodating, sits smack dab in the middle of a dense collection of lifeless grey and beige federal office buildings that have all the charm and personality of a filing cabinet. No other setting could better embody the cold, bureaucratic hand CMS has taken with HME providers.

But these AAHomecare members didn’t come for the scenery. They were there primarily to convince Congress to suspend round one of CMS’s competitive bidding program. (See our News section for full coverage of the Conference, starting page 8.) Providers spent two days of the event preparing for meetings with with the staff of Representatives and Senators to make them aware of the impact competitive bidding will have on the HME industry and what that would mean for a variety of voters. The mood at the conference was part pep rally and part Bunker Hill — morale was high and attendees were pumped up, but the “little guys” from the HME space knew fighting competitive bidding would be an uphill battle.

Chalk some of that esprit de corps up to the fact that HME providers have plenty of excellent reasons to fight competitive bidding tooth and nail. As various speakers ranging from politicians to economists to industry representatives pointed out, CMS’s current competitive bidding program could drive down providers’ revenues and tighten their margins; it could degrade quality of service for patients; it could potentially make the business case for serving rural patients so untenable that those customers could get left out in the cold; it might be open to gaming; and, as the economists speaking at the conference noted, it could actually raise costs for CMS in the long run.

Additionally, CMS has yet to show any quantifiable success from round one, or demonstrate that any savings are left over after the yet unknown operational costs of the program have been factored in. Interesting budgeting technique...
Yet, the competitive bidding steamroller keeps moving forward regardless of these concerns and despite providers’ efforts on the Hill. Round two looms on the horizon — CMS announced in January the next 70 MSAs for round two, and roughly a week after AAHomecare’s March conference it announced that providers in those areas wishing to participate must apply for accreditation by May 14 and be accredited by October 31.

Want me to repeat that? Start by May 14, and finish by October 31. We said in in our March cover story on accreditation that the clock is ticking, and now it appears the hands just got pushed forward even further. Suffice it to say that the pressure is on.

Ambrose Bierce said that “The gambling known as business looks with austere disfavor on the business known as gambling,” and when one puts the fight to suspend competitive bidding in the light of Bierce’s sentiments and CMS’s recent moves, it’s probably a good idea to hedge your bet.

Should providers continue to work the regulatory and political end of the industry in hopes of delaying competitive bidding so that its structure and impact on a very important sector of the nation’s healthcare can be properly and transparently examined and addressed?Absolutely. It’d be crazy not to.

But it would also be crazy to ignore the fact that this is going to be a tough fight. Providers need to keep finding ways to uncover new opportunities and gain new efficiencies in case that fight doesn’t go their way. This month’s cover story, “Souped-up Software” (page 29) discusses how providers can leverage software HME Software systems to achieve both — while you fight the good fight.

This article originally appeared in the April 2008 issue of HME Business.