PROTECH HOME MEDICAL COMMENTS ON CMS DECISION TO CANCEL 2021 COMPETITIVE BIDDING PROGRAM FOR 13 PRODUCT CATEGORIES
CANCELLATION OF 2021 BIDDING PROGRAM PROVIDES CLEAR MARGIN OUTLOOK ACROSS PRODUCT MIX, ENSURES PATIENT BASE STABILITY, AND PROVIDES GREATER LEVEL OF PATIENT CARE
Cincinnati, Ohio – October 28, 2020 – Protech Home Medical Corp. (the “Company” or “Protech”) (TSXV: PTQ) (OTCQX: PTQQF), a U.S. based leader in the home medical equipment industry, focused on end-to-end respiratory care, is pleased to comment on the decision made by the Centers for Medicare and Medicaid Services (CMS), wherein the CMS has not awarded contracts for any of the product categories that would have affected Protech’s revenue because the expected payment amounts did not achieve expected savings for the Competitive Bidding Program (CBP) that was expected to begin on January 1, 2021.
Protech believes that in light of the COVID-19 pandemic, the decision made by the CMS was appropriate and proper given these unprecedented times. The decision will help to ensure that there are no unnecessary barriers to the quality of care for patients, such as access to home respiratory products, other needed supplies, and durable medical equipment. The Company believes that continuing the CBP program at this time could have had a negative impact on patient care that is centered around quality of service. It is evident that home-based care for the growing population of elderly Americans is crucial, and reducing the burden on hospitals, nursing homes, and other senior living facilities, will be imperative going forward. To that end, Protech is prepared and ready to respond to an acceleration of the pandemic, and like other industry participants, will continue to be focused on building capacity in the coming months, rather than preparing to cut capacity, and this CMS decision eliminates that threat.
The Company believes that the decision by CMS to not award competitive bidding contracts for any of the 13 product categories for Round 2021 was also predicated on the fact that the previously compet-ed payment amounts did not achieve the expected savings. Accordingly, the Company believes that reimbursement rates have likely neared a floor and there is no Medicare reimbursement rate cut risks for the foreseeable future. This is extremely bullish for Protech’s current business as it provides the Company with a significantly clearer outlook on the margin for its product mix, such as PAP machines, nebulizers, oxygen systems, wheelchairs, hospital beds, and seat lifts, alongside non-invasive ventila-tors (NIV), which had been removed previously. Moreover, this assists the Company in maintaining a stable patient base, with accelerating growth as the Company continues to build market share. Protech has played a vital role in hospital discharges, serving vulnerable patients and the Company is delighted that CMS recognizes the importance of the role HME providers play.
“This is truly a historic moment for our company and industry, and we couldn’t be more pleased with the CMS decision to cancel the 2021 Competitive Bidding Program, as this will have the likely result of substantially bolstering patient access to home-based care treatment,” commented Greg Crawford, CEO and Chairman of Protech. “As the COVID-19 pandemic continues, we must continue to build our capacity as an industry to provide the upmost level of care to the growing number of patients that require home-based healthcare solutions. Home-based care is the most effective way to reduce both short- and long-term stays in hospitals, and we are delighted the CMS has recognized that now is not the right time to implement the Competitive Bidding Program. This is an extraordinary tailwind for our business, and with our first-rate infrastructure, pristine balance sheet, operating momentum, and organizational continuity, we are ready to capitalize on this opportunity and aggressively grow our market share.”
Protech provides home delivery and efficient online set-up of equipment for, primarily, chronic conditions. The Company operates out of 48 locations in 10 states with over 17,000 referring physicians and approximately 110,000 current active patients.