Magazine article Drug Topics

CMS' Prices for Round One of DMEPOS Competitive Bidding Raising Concerns

Magazine article Drug Topics

CMS' Prices for Round One of DMEPOS Competitive Bidding Raising Concerns

Article excerpt

The home care industry is very concerned about the Centers for Medicare & Medicaid Services' announcement that it will pay on average 26% less than current levels for 10 product categories included in the first round of competitive bidding for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The first round of the program begins July 1 in Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh, Riverside, and San Juan.

Bill Popomaronis, R.Ph., VP, long term and home healthcare pharmacy services for the National Community Pharmacists Association, is worried that many providers may be forced to go out of business. "Twenty six percent is a big percentage. A small supplier may say, 'I'm going to bid low.' But sometimes you can pick up business and go out of business. If you pick up business too fast or don't have the financial resources and staffing to address the increase in business, there could be cash flow problems. I'm concerned that the big guys are going to go after the little guys in this case. What if access is affected? They (CMS) have already cut down the number of suppliers significantly."

Popomaronis believes that although CMS said that 64% of the winning bidders were small suppliers, community pharmacies were disenfranchised in the bidding program. "Community pharmacies are also small suppliers, but we're defined as large suppliers. The average community pharmacy based on 2007 data does about $3.5 million in sales. If you own more than one pharmacy, your total aggregate business says whether you're a small supplier or not. In an aggregate, they'd be above the small supplier definition. The feedback we're getting is that community pharmacies were not bidding in large numbers mainly because of the high cost of accreditation and the fact that they are defined as large suppliers. My question to CMS is, 'How many community pharmacies are represented in the 64% of small suppliers they are talking about?' I would guess not many."

Jim Walsh, president and general counsel of the VGM Group, Inc., echoed Popomaronis' sentiments. "The lower the levels of service funded by Medicare, the lower the number of providers there will be who wish to be in that business," he said, adding, "their (CMS) public relations spin that 64% of the 'awards' went to small businesses is misleading. …

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