Pharmacies Prepare for Competitive Bidding, Celebrate Minor Victory

As the industry responds to the final rule on competitive bidding, issued by the Centers for Medicare & Medicaid Services (CMS) on April 10, HME providers in the 10 metropolitan statistical areas are gearing up for accreditation and evaluating business strategies to determine their chances for survival. But how are pharmacies that sell some HME products coping?

A victory for pharmacies came with CMS' exemption of diabetes testing supplies from competitive bidding requirements. Community pharmacists had opposed the regulations that would force many small pharmacies to stop providing diabetes testing supplies.

"We are grateful that CMS recognized the importance of patient access to these much-needed, life-saving tools from their local community pharmacy instead of through the impersonal and slower mail order system," said John Tilley, R.Ph., president of the National Community Pharmacists Association (NCPA) and a pharmacy owner from Downey, Calif. "As a result, patients will continue to benefit from the indispensable advice provided by community pharmacists who can ensure that people with diabetes are monitoring their condition effectively."

Diabetes supplies that are purchased at community pharmacies, including blood glucose level monitors and testing strips and lancets, were among a short list of durable medical equipment spared from competitive bidding. Only diabetes supplies purchased via mail order will be subject to the competitive bidding requirement at this time.

NCPA, along with other organizations concerned with the rules' impact on the health and safety of Medicare beneficiaries, warned CMS that the proposed accreditation and competitive bidding requirements would dramatically reduce patient access to diabetes testing devices and other health care products.

Though diabetes supplies have been left off the initial list, pharmacies want a CMS' word that the category won't appear on future lists.

"The Medicare Modernization Act of 2003 was designed to make certain aspects of Medicare more cost-efficient and user-friendly," said NCPA Executive Vice President and CEO Bruce Roberts, R.Ph. "We believe the law will truly be enhanced if CMS permanently exempts diabetes supplies from unfair competitive bidding requirements and only includes products that are classic durable medical equipment, such as hospital beds or wheelchairs."

NCPA has also spoke out against CMS' promotion of mail order supplies.

"We are concerned that CMS has indicated that it will strongly promote mail order diabetic supplies, thus harming the patient-community pharmacist relationship that is crucial for effective compliance," added Roberts.

NCPA commented that the final rule is vague on important specifics that CMS leaves for future clarification, such as potential expansion of the categories of included DME supplies-presumably outside of the public comment process. The group also called accreditation requirements "burdensome."

Pharmacies in the 10 MSAs that provide any of the products subject to competitive bidding will need to undergo accreditation by 2008 to participate in Medicare. By 2010, all pharmacies that provide DMEPOS, whether or not the items are on the current or future competitive bidding list, will have to receive accreditation.

The current categories for competitive bidding include: oxygen supplies and equipment; standard power wheelchairs, scooters, and related accessories; complex rehabilitative power wheelchairs and related accessories; mail order diabetic supplies; enteral nutrients, equipment and supplies; CPAP devices, Respiratory Assist Devices, and related supplies and accessories; hospital beds and related accessories; Negative Pressure Wound Therapy pumps and related supplies and accessories; walkers and related accessories; and support surfaces (group 2 and 3 mattresses and overlays, Miami and Puerto Rico only).

The CMS guidelines also include a "30 percent rule" to ensure that a sufficient number of small suppliers, such as independent pharmacies serving rural communities, can continue to provide DMEPOS products to their communities. The rules specify that 30 percent of competitive bids must come from small businesses. CMS will use the Small Business Administration's definition of a small business being $3.5 million or less in gross revenues. In addition, small suppliers will be allowed to unite with other small suppliers to submit bids.

This article originally appeared in the April 2007 issue of HME Business.

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