YARMOUTH, Maine – From providers getting contracts to service areas located thousands of miles away to providers unprepared to service contracts in their local areas, sources predict problems aplenty when Round 2 goes into effect July 1.

“It’s going to be a nightmare,” said Mike Marnhout, owner/president of Lexington, Ky.-based Bluegrass Medical, which received contracts in Round 1 but not in Round 2.

Since the list of contract suppliers was released April 9, providers have been doing some analysis of their own. And they don’t like what they see.

Provider Jerry Hall, who didn’t receive a contract, says that 80% of the contract suppliers in the Jacksonville, Fla., competitive bidding area (CBA) are located 80 to 100 miles away.

“I’ve got local hospitals that are very concerned it’s only two companies providing walkers locally,” said Hall, owner of Hall-Moore Medical. “The hospitals require you to deliver the walker to the hospital room in order for the patient to leave the hospital. It’s going to be chaos trying to get patients discharged.”

It’s much the same scenario in the Suffolk County, N.Y., CBA, where provider Lee Lewin says that in most product categories there are only two or three local companies with contracts and he’s not one of them.

“The hospital is almost across the street,” said Lewin, owner of Lewin Medical Supply in Riverhead, N.Y. “They call us 10 times a day with somebody being discharged and they need a walker or they need oxygen. It’s not going to work for a company in California, but even a company that’s 50 or 60 miles away?”

Even in cases where there are local contract suppliers, providers predict they will have difficulty handling the potential onslaught of business. Provider Rick Wilson, who didn’t receive a contract, says he does seven to nine beds a day in the Los Angeles CBA.

“We have found no one on the DME side that’s going to be able to keep up with our demand,” said Wilson, vice president of Apguard Medical in Woodland, Hills, Calif. “Who are we going to farm this stuff out to that’s going to do it in a timely manner?”

All of these scenarios have left providers wondering the method behind the mayhem. How did CMS determine who received and didn’t receive contracts? Grace Healthcare, a full-line provider in Gulfport, Miss., received only a small handful of contracts in three CBAs.

“Some of the ones we didn’t win, we are looking at our bid and the single payment amount, and our bid is a couple cents lower,” said Jimmy Cates, communications manager.