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Knowing that Competitive Bidding is looming just over the horizon, it would be natural and understandable for you to feel paralyzed in your fear of the unknown. Maybe you are waiting to see what happens when the quality standards and 10 Metropolitan Statistical Areas (MSAs) are released. Maybe you are in a rural area and you believe you have time to wait and see. It is possible that you may not want to become accredited until the very last minute. Perhaps you are literally stuck - you don't know what exactly will happen, if it will happen to you and what you will do about it. Despite all of this, the last thing you should do is sit idly by. There are many ways to begin preparing for this new reality. By getting started now, you will educate yourself ahead of time and stay ahead of the curve in planning for tomorrow. Even if you don't know exactly what tomorrow will bring, there are ways to prepare. Here's how:

Evaluate your Revenue

Segregate your revenue/sales by payer and by product. Know your top grossing products and from which payers that revenue is driven. This will show you your potential exposure in the event that you are in one of the chosen MSAs. It would behoove you to focus on individual product types (HCPCS) and product categories. We know that Medicare will require you to bid on an entire product category if you choose to bid. If you choose not to bid, you will know what your potential revenue shift will be so that you can begin looking for alternate revenue sources. For example, if oxygen represents 25% of your overall business and you know that Medicare pays for 99% of that oxygen, if you choose to bid, will you grow within your MSA or expand into another region? Will you work with another company to network together? If you choose not bid and your area is one of the top 10 MSAs chosen, what will you do to make up the 25% loss of revenue? Once you determine your revenue by product and payer, you will be able to make a sound business decision about what to do if you choose, lose or choose not to bid.

Examine Internal Operations

Whether or not you bid, you should take a look at internal operations to determine what you can do to streamline operations. Regardless of what happens, you will have created more efficiencies and make your business run more smoothly. For example, are you billing all payers electronically if they accept electronic claims? What about electronic funds transfer (electronic payment posting with Medicare)? This can save you a considerable amount of time. How much manual work do you do? Why? Avoid this at all cost and see how much you save in time and effort. Operational enhancements like these will create savings. This in turn translates into a more economical bid price and/or a more attractive company to sell.

Consider your Demographics

As you streamline to find more economies, remember to consider your demographics. What is the average age of your market area? What are the socioeconomic influences that impact your business? To say you will diversify into sports and recreational products that are expensive private pay items when the majority of citizens in your area are on Medicaid would seem like a futile business proposition. On the other hand, if you live in a young and growing area and you decide to become a pediatric niche provider, you may find synergy. As you can see, demographics matter when considering your future direction.

Create Several Possible Scenarios

After you improve your operational flow and you carefully scrutinize your core businesses, focusing on your demographics, you should devise a plan that includes several options. If you veer in any one direction, you may be surprised to find it won't work. By planning several options, you will easily be able to turn around and follow a different path. This means that if you submit a bid for Medicare oxygen and you learn that you do not win, if you create a contingency plan, you will remain viable. Anticipate many various possibilities, knowing that if one fails you can easily switch to another. This is true whether you decide to expand your business for competitive bidding or reduce your product selection veering away from Medicare. Either way is fine but arm yourselves with other ideas so you don't get stuck. The last thing you need is to have to sell. If you choose to merge, that's great. Make it your choice not someone else's.