YARMOUTH, Maine – Medicare’s competitive bidding program has decimated their ranks over the past 10 years and now those HME providers that are left are in the middle of a pandemic and facing Round 2021.
The industry has seen a significant decline in providers nationwide since the bid program debuted in 2011, ranging from 48% in Illinois and Arizona to 13% in Maine and Alaska, according to the VGM Group.
“Reimbursement cuts from bidding have made it almost impossible for providers to provide products at any kind of profitable margin,” said Ron Evans, co-founder and CEO of Mesa, Ariz.-based Valley Healthcare. “There were a lot of very good companies just in Phoenix, companies that provided good quality care, that either aren’t able to survive or are struggling to.”
Particularly in rural states, those providers that are left are being asked to pick up patients who no longer have providers. Evans has received calls asking if the company has considered expanding into certain underserved areas.
“We’ve had opportunities to pick up new patients,” he said. “By the same token, it’s not the way you would want to grow.”
It’s the same story in Texas, which has seen a 44% decline in providers. Kevin Hill has had to streamline operations at his 40-year-old company, even as he picks up patients from former competitors.
“We had a competitor out of Fort Worth, they had a branch they shut down so we are getting all their patients,” said Hill, president and founder of Tyler, Texas-based CPS Medical. “But, we had three branches and now we have one.”
Despite a coronavirus pandemic that has further increased demand but simultaneously challenged operations, providers are hanging in there and are, in many ways, in a better position than hospitals and restaurants, says VGM’s John Gallagher.
“The feedback from many providers is they are pleasantly surprised their business is still here,” said Gallagher, vice president of government relations. “The Paycheck Protection Program and other assistance that came through—I think that helped many.”
Evans, who retired recently after 22 years in the business, is optimistic changes made to the bid program are a step in the right direction, but says it’s crucial to continue lobbying for relief.
“It’s crucial to fight for what is fair and ensuring patients have access to good care,” he said. “I think we can’t ever give up that fight.”
This article indicates to me that there are a lot of bargains to be had out there. There are probably a handful in our market area that are hanging on a bit longer because of PPP money. The fact that Protech is all cashed up looking for acquisitions is common knowledge i would imagine and the phone must be ringing off the hook with potential deals.