Industry Advocacy

An Unanticipated NCB Tsunami

Hospitals and physicians can become advocacy partners with DME suppliers.

With the start of Round Two of the DME national “competitive” bidding (NCB) program coming in just a matter of weeks, there are several unintended consequences headed towards physicians and hospital discharge planners that CMS has overlooked: Local Medicare DME suppliers available to serve Medicare patients are being reduced by over 90 percent, and referral sources a supplier to serve their patients will soonbecome a much bigger problem.

Every hospital and every physician has a long-standing relationship with local DME suppliers who will take their orders and discharges at all hours of the day, including weekends and holidays. Usually one phone call or fax results in almost instant response to the needs of the patients. Physicians and discharge planners have built a relationship over many years and know who provides the quality care and prompt service they want for their patients. Soonthis will be no more.

Despite DME being only 1.4 percent of the Medicare annual expenditures, this small industry plays a huge role in reducing healthcare costs by keeping patients safe and comfortable at home. Consider only that a patient who stays one extra day in the hospital will cost more than this same patient being sent home with oxygen, a hospital bed, and a wheelchair combined. In fact, the payment for all three of these products costs less than $15 per day. A patient denied discharge because of the inability to find a responsive DME supplierswill cost more than one year of receiving these three products at home.

This is the almost certain scenario when “competitive” bidding begins on July 1, 2013. With the pool of local suppliers reduced by 90 percent and the vast majority of companies winning bids in the 91 bid areas being outside the local market, physicians and discharge planners will suddenly find their ability toorder and receive DME products and services for their patient very complicated.

What Bidding Means for Referrals

No more one-phone-call orders; there will likely be no local company who has been offered contracts in all of the bid categories. Moreso in Round Two than in Round One, reports so far indicate that few suppliers have won all product categories in any given CBAs, except for a few small companies who do nothave the resources to meet these needs.

Physician staff and hospital discharge planners will be left with calling Medicare to find out what suppliers can serve patients with certain products. Even though the losing bidders may grandfather their existing patients, they cannot accept new ones, and many of these local suppliers will be unable to help referrals sources find a supplier to serve the patient. They may not know who can provide what products, or they may simply not have the resources to help considering the circumstances. Local suppliers who did not receive a contract will be busy down-sizing and finding new sources of revenue just to survive. Even if a supplier can remain in business with a 45 percent average reduction in payment amounts, it will take five times as much business to havethe same revenue.

Suppliers, whether offered contracts or not, should begin planning their own education process for referral sources. It is wise to wait until after the contract winners are announced to begin sending materials to patients or referrals sources, but suppliers should not wait until June to begin planning. When the contract announcement is made, then start letting your referringphysicians and hospitals know your status.

Many suppliers will create a flyer to include with invoices and statements to inform their patients, an effective way to keep patients informed. These flyers can also provide information on how to contact legislators so that patients canexpress their concern with the bidding program.

Helping Our Partners

Suppliers will also need to create a briefing document that can be shared with referral sources. Most physicians, discharge planners, and social workers have no real idea about this flawed program that will limit their referral ability and force changes to how they serve their patients. When CMS sends out their educationalmaterials, many will overlook them without realizing the importance.

Suppliers should develop their own effective education plan for all of these referral sources, and this plan should also include advocacy materials. Plan meetings with your referral sources and ask to speak at in-service training sessions. Ask to be a presenter on their programs. Few will realize the disasterthat is coming and most will be grateful for the help.

This also gives you an opportunity to provide advocacy information so that referral sources can help let Congress know this is bad policy and will have a negative impact on patient care. Prepare an issues paper and talking points that include the contact information for the Representatives and Senatorsserving your district.

Make it easy for referral sources to make contact with Congress about the impact of the bidding program on their patients. While the contractors may have not been named, you know whether you were offered a contract. During this advocacy discussion, tell them how this will impact you. If you are not a contractor, explain your position and whether you will grandfather. If you signed a contract, explain how services and extras will be limited and how theprogram will affect your deliveries and timeliness.

Physicians and their staff, discharge planners, social workers, and there employers can be strong advocates for stopping this flawed program. Use the opportunity to add power to our fight. Combining education and advocacycould make the difference to our future.

This article originally appeared in the April 2012 issue of HME Business.

About the Author

Wayne Stanfield, a former air traffic controller, has been in the DME industry for 20 years. He is currently president and CEO of the National Association of Independent Medical Equipment Suppliers (NAIMES), as well as the executive director of the Home Care Alliance of Virginia Inc. (HCAV), a provider network with 63 locations in 11 states. He can be reached at (434) 572-9457 or via e-mail at


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