Weaver McClure

Dana Picard

A quick look at the product list for competitive bidding reveals "mail order diabetes supplies," but there is nothing about "non-mail order." It does not take a lawyer to figure this out, but we asked Jeff Baird, JD, (just in case) and he confirms that the rule does not govern non-mail-order supplies.

Why did CMS make this distinction and was it expected? Does it count as mail order if a provider abandons UPS and uses his own truck to deliver supplies to local patients? "I was surprised they singled out mail order," says Weaver McClure, owner of Med Star Diabetic Supply in Forest Hill, Tex. "I just figured it would be all or nothing. I think CMS was concerned about access. If patients want to go down to the local pharmacy or DME, they can still bill Medicare for those supplies. CMS did not want to take that availability away from the patients."

Over at Diabetic Solutions in Coral Springs, Fla (a CBA), owner Dana Picard thinks the mail-order distinction was more about weeding out fraud and abuse.

Whatever the reason, Picard and others want to know: If they use their own trucks to deliver supplies, does that count as mail order? We asked attorney Denise Fletcher, JD, from Brown & Fortunato, Amarillo, Tex. Fletcher says as long as you are delivering supplies locally with your own trucks, you will not be considered a mail-order provider.

While the truck delivery method is an option for Picard, not winning a contract would be a brutal hit to her accredited 15-employee business. "With no contract, we would be very close to closing our doors," admits Picard. "We would have to let go three fourths of our staff, and that is scary because you have loyal people working for you."

As an accredited provider in a CBA (Fort Worth area), McClure sells diabetic supplies exclusively— mostly by mail order. The good news is that if he wins a contract, he expects the bid price to be livable. "Who knows what the bid is going to be," says McClure, "but I don't see it going too low. Our rates are already low."

In fact, McClure believes that most diabetic suppliers are already fairly efficient. "I don't see a whole lot of savings to be had—especially in mail-order diabetes. If you look at some of your national companies, their bottom line is only 5% to 7% and a lot are carrying 200 million to 300 million dollars' worth of debt to service," says McClure. "So if you cut 10% off the top, they are going to be negative. I don't see a lot of cuts coming into diabetic supplies unless someone decides to bid low—but I don't think they'll be in business long if they do."