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Layoffs And Business Closures Caused By Medicare Bidding Program Will Harm Patients Says AAHomecare
Date:2/27/2013

ontracts because the reimbursement prices are so ridiculously low.

That is happening across the country.

"I am a director of three DME operations, two within Round 2 (competitive bidding areas).   We were awarded bid opportunities in Jackson, Miss., and Birmingham, Ala. The single payment amounts for oxygen and CPAP are not sustainable and we declined. As a result, we have laid off three employees," says Rodney Meadows , director of East Alabama Home Medical Center, LLC in Opelika, Ala., Bessemer Home Medical Center, LLC in Bessemer, Ala., and CPAP Solutions, LLC in Jackson, Miss.

Most DME providers are confronting the challenges presented by the bidding program, but none may be more daunting than those faced by providers of diabetic testing supplies. The industry was stunned when CMS announced it was moving diabetic testing supplies to mail order, resulting in a reimbursement drop of 72 percent for suppliers.

"Contract bid amounts are far below what we can purchase products for in many cases," says Mary Caldwell , vice president and general manager of City Pharmacy of Elkton, Inc. in Elkton, Md.  "I currently employ 45 people and stand to lose 50% of my DME business. CMS proposes to pay $10.77/50 test strips. Our cost for the cheapest generic brand is $12.13, and brand strips cost us between $25 and $50 dollars a box. Where did this bid come from, China? Are our seniors going to receive inferior biologics?"

Caldwell says it is "a devastating" blow that will force her to lay off at least half of her 13- person DME staff and several pharmacy workers. "In an area already rocked by terrible economic woes, we are not sure if we can weather this storm," Caldwell says.

Mark Gielnia
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SOURCE American Association for Homecare
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