Editor's Note

Going the Distance

Round Two has reached implemtation, but the fight to stop bidding continues.

• By David Kopf
• Sep 01, 2013

Everybody has a plan until they get punched in the face.” Regardless of your opinions on Iron Mike Tyson, it’s hard to ignore the truth of his famous quote. I was recently reminded of it by one of this industry’s particularly smart and creative minds, and no saying could better describe the predicament in which HME provider businesses find themselves.

Providers have built their businesses. They’ve developed their staff. They’ve lovingly tended their referral partners. And they’ve worked hard to provide top-tier care to their patients. And the Centers for Medicare and Medicaid has come along and punched them right in the face with a competitive bidding knuckle sandwich.

CMS telegraphed this punch — for years dating back to its pre-Round One trials — and for a long time providers have been working overtime to dodge it, but that punch has kept coming. And while HMEs tried to block it; while they tried to parry it; while they tried to dodge it, that punch connected; first with Round One implementation, and then with Round Two implementation in July. Not surprisingly, a lot of providers, especially those without any contracts in-hand, are feeling a little weak in the knees. They might even be tempted to throw in the towel. Who wouldn’t after that kind of blow?

Well just remember this: Even Iron Mike Tyson — a boxer with a nearly uninterrupted string of victories by knock out — fell. In February 1990, Tyson stepped into the ring with James “Buster” Douglas in Tokyo, and lost his status as undisputed champion. Iron Mike met a fighter that was motivated, spirited and replied to Tyson’s wouldfamous upper cuts with a unrelenting stream of jabs. Douglas fell at one point, but came back to win the match with Tyson wondering how he lost his long-standing status as the tyrant of the ring. In short, Tyson got “punched in the face.”

Stick and Move

The same thing can happen to CMS. The key is for providers to channel the motivation and flexibility of Buster Douglas in their response to the current funding, regulatory and business landscape while continuing to bang away at the regulatory fight. They need to survive now so they can go the regulatory distance on Capitol Hill and ensure the passage of H.R. 1717, the bill that would replace competitive bidding with the industry’s market pricing program.

That means they need to diversify their revenue streams. That sounds simplistic, but it is the challenge providers ultimately face. They must find ways to develop the business that does not fall under competitive bidding. This is why HME Business has devoted a considerable amount of its coverage to not just driving efficiency and cutting costs, but building entirely new business models, such as cash sales. By tapping into retail opportunities providers can offer up a broad range of products to a broad range of patients covering a broad range of products, with CMS having no part in it.

But retail sales are just one way to stay in the ring and keep slugging it out. We have also focused our coverage on home access opportunities; auto access; expanding into orthotics and prosthetics; finding new referral partners in long- and shortterm care facilities; and senior care, to name a few. Expect that coverage to continue, because while no one wants to change, the plain fact of the matter is that providers need to need to change if they want to stop competitive bidding.

Now is not the time to let CMS’s Round Two punch leave you dazed. Now is the time to get creative; to reinvent the business; and find the financial breathing room that will help the industry focus on fighting for passage of H.R. 1717. When providers can do that, they’ll leave CMS dumbstruck in the middle of the ring, wondering how it just got “punched in the face.”

This article originally appeared in the September 2013 issue of HME Business.