Ms. White,

Thank you for speaking with me earlier this morning, I truly appreciate your candor as well as the rapport that I feel we shared on the subject of the updated fee schedule agreement between GA DME providers and BCBS of GA.

Based on our conversation, I would like to address in point the issues that I feel GA DME Providers, as well as your BCBS health plan memberswill face if this reducedproposed pricing schedule goes into effect as planned.

1: The proposed fee schedule reflects nearly a 50% reduction in the current fee schedule, with profit margins in DME under constant attack theseunsustainable pricesand will cause providers to stop accepting BCBS benefits. This will limit patient access and ultimately hurt your customers and your company.

2: The reduction in the fee schedule seems to be based largely onCMS flawed Competitive Bidding Program. Currently, the DME industryis collectingthousands of patient complaints and submitting them to members of Congress, the OIG, and CMS to demonstrate the incredible strain this program is placing on patients and providers of the DME benefit. It is also notable that currently there are several pieces of legislature in Congress to stop CMS’s flawed bidding program. By basing your updated fee schedule on Competitive Bidding prices, BCBS is setting itself and its customers up for failure when the Competitive Bidding program falls apart.

3: The proposed reduction in fee schedule based on the national Competitive Bidding rates, fails to take into consideration one of the cornerstones of the national Competitive Bidding program; namely the exclusion of rural areas based on wildly different demographics and health systems than exist in Competitive Bid areas (urban areas). Even CMS realizes that their bid rates are unsustainable in rural areas, that is whyCompetitive Bidding doesn’t exist outside of certain zip codes in major metropolitan areas. For BCBS to apply these prices (or a 50%) reduction in fee schedule in rural areas, you will severely cripple the already fragile health systems in theserural areas, and leave thousands of your members without DME service at all. I speak frommy owncompany’s experience when I say that we have store locations in areas where there are NO OTHER PROVIDERS, plain and simple. If you remove the DME benefit from your members in these areas by driving these providers out (which is assured with the proposed fee schedule), you will only shift your cost from the DME benefit to the Hospital/Critical Care benefit, as your members will have nowhere else to turn.

I feel that each of these points are truthful and accurate based on my company’s 32 years in the DME business, and I look forward to opening a dialogue with BCBS to address these points and reach an amicable agreement on the proposed fee schedule.

While I do understand that BCBS does have to turn a profit, those of us that operate DME businesses must as well. This combined with our duties to care for our customers and your members means that I can not foresee MRS Homecare, Inc. or other GA providers agreeing to participate at these proposed rates.

I would also point out that the state of Georgia has one of the largest and most influential state DME associations in the country: GAMES (Georgia Association of Medical Equipment Suppliers) of which I am a member of the board of directors; rest assured that GAMES will weigh in on this issue and will make recommendations to our membership on how best to deal with the situation. In the past we have had success on similar issues by organizing letter-writing campaigns, alerting our customers to the practices of their insurer, and contacting our members of Congress to assist us.

While I do serve GAMES, the statements above are my own and reflect the opinions/concerns of MRS Homecare, Inc. andshould in no way be taken as an endorsement, or guarantee of any action by GAMES or any other GAMES members.

Thank you again for your time, I look forward to conversing with you.

Sincerely,

Thomas T. Riddle

MRS Homecare, Inc.

Vice President