At a town hall meeting a year ago, President Obama said that home-based care could play a major role in controlling Medicare costs by keeping older people out of more expensive institutional care. “I actually think homecare ends up being cost-efficient in many cases rather than institutional care, and it helps keep people in their homes,” the president told his audience in the Cleveland suburb of Shaker Heights last July.
In March, Sen. Amy Klobuchar (D-Minn.) agreed with the president, declaring that “homecare is a major part of the solution in terms of cost-effectiveness” and adding that with the explosive growth in the nation’s older population, “homecare is going to be vital.”
But their voices aren’t being heard. The Medicare program doesn’t seem to agree with their assessment: while key public officials embrace the aging-at-home concept, the government has been moving in the opposite direction.
The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, continues to advocate for policies and regulations that will restrict patient access to medical equipment, such as power wheelchairs and oxygen, which is critical to allowing patients to age with dignity in their homes. These policies have been adopted despite research from a variety of sources that document significant financial and patient benefits.
Even the recently-enacted healthcare reform legislation follows this disturbing trend by eliminating an option allowing a Medicare beneficiary to purchase a power wheelchair in the first month that the product is prescribed. Many providers, particularly in today’s tight credit market, will have difficulty covering the upfront costs associated with providing the power wheelchair, as well as maintaining it while receiving payments over a 13-month rental period. More businesses will likely no longer provide power wheelchairs, disrupting patient access, especially in rural areas.
In addition, the government has enacted a 36-month cap on oxygen reimbursement, a policy that removes links between the payments and the medical needs of Medicare beneficiaries.
The fundamental problem is this: the CMS bureaucracy has sought to control Medicare costs by adopting policies and regulations that harm providers and slow expansion of the Medicare mobility benefit. These measures have included a 37 percent price-cut for power wheelchairs over the last three years, denial of many legitimate reimbursement claims that are later reversed after appeals, and a bidding process that will reduce competition and put providers out of business rather than increase competition.
“For more than a decade, researchers have praised aging-at-home as a concept that will save the government significant money, while being a popular option for patients who want to keep their freedom and independence,” said Tyler Wilson, president of the American Association for Homecare (AAHomecare). “But it’s puzzling that our government keeps enacting policies that make it more difficult for Medicare beneficiaries to obtain the medical equipment that can help them stay in their homes longer and save taxpayer dollars.”
Health Affairs, a leading journal of health policy, reported in its July/August 2005 issue that there are significant advantages—for the government and patients—in providing mobility assistance.
“There is consensus among consumers, policymakers, and researchers that assistive technology is important to promoting self-care and independence among people with disabilities,” Health Affairs reported. “An estimated 75–90 percent of disabled older community-dwelling adults use some form of assistive technology. Moreover, evidence suggests that such technology might be more efficacious than personal care in reducing functional limitations, might reduce reliance on personal care, and might slow functional decline and lower health-related costs. A recent survey of unpaid caregivers found that 40 percent had obtained assistive technology on behalf of people in their care to ‘make things easier.’ ”
Another study by economists Clifford L. Fry, Ph.D., Donald R. House, Ph.D., and Kent D. Nash, Ph.D, provided specific details on savings, concluding that the Medicare program pays $10,770 a year less for beneficiaries with power mobility equipment because they need fewer hospitalizations and emergency room visits associated with falls and fall-related injuries.
“The largest net savings appear in the category of inpatient expenditures,” wrote the economists, whose 2005 study used Medicare claims data to investigate the effects of power mobility equipment on Medicare’s healthcare expenditures. “This result is consistent with reports by others that mobility assistive devices can reduce falls and related hospitalizations and associated expenses… Significant Medicare savings are also reported for outpatient, home healthcare, and physician services expenditures…The combined reductions in these Medicare expenditures more than offset the increase in durable medical equipment expenditures for those receiving Medicare funding for powered mobility.”
Meanwhile, staying in their homes is a clear priority for the elderly and patients with disabilities. “Loss of independence and loss of mobility are what people with disabilities 50 and older say they fear the most as they look to the future,” AARP reported in a 2003 study. Moreover, the U.S. Census Bureau calculates that the number of citizens over 65 will more than double between 2010 and 2050, greatly increasing demand for mobility assistance.
The year-long debate over healthcare reform was supposed to usher in a new era of healthcare policy, one in which the priority was to increase efficiency by targeting taxpayer dollars to the most practical services and those that produce the best outcomes for patients.
That new priority needs to start with the Medicare program.
“The strategies are outdated, and the policies are broken,” said Wilson of AAHomecare. “What good does it do to artificially suppress utilization of homecare products when these products can ultimately save ten-fold in taxpayer dollars and allow Medicare beneficiaries the freedom and independence that they desire and deserve? We are hoping that, if Dr. Donald Berwick is confirmed as CMS administrator, he will place a priority on building a Medicare program for the future, one that adopts the aging-at-home concept that beneficiaries want, and that government can’t afford to ignore.”
Monday, May 24, 2010
Tuesday, May 18, 2010
GAO Confirms Payment Delays to Medical Equipment Providers; Questions Arise as to Whether Medicare Can Implement Reforms
Legitimate Medical Equipment Providers Are Victimized by Administrative Backlogs
A recent study by the Government Accountability Office (GAO) confirms that the processing of Medicare reimbursement claims for medical equipment providers continues to be a problem despite the government’s efforts to implement reforms. The administrative shortcomings within the Medicare program have caused painful payment delays and other problems affecting medical equipment providers.
Durable medical equipment providers, such as those supplying power wheelchairs and oxygen therapy, have been victims of the Medicare system’s questionable management. They are burdened by excessive audits, claim denials that are routinely overturned after time-consuming appeals, and documentation guidelines that often contradict previous policies. While the Centers for Medicare and Medicaid Services (CMS) cite cracking down on fraud as a rationale for some of these procedures, the way they have been implemented has harmed legitimate equipment providers.
“The homecare community applauds efforts to root out Medicare fraud,” said Tyler Wilson, president of the American Association for Homecare (AAHomecare). “But Medicare beneficiaries and those who provide them with vital medical equipment deserve a more efficient administrative process, one that does not create major obstacles for legitimate businesses that are serving some of the most vulnerable people in our society. This is wrong, and Congress and the administration should put an end to it.”
Wilson noted that the GAO report, “Medicare Contracting Reform” (GAO-10-71, March 2010, http://www.gao.gov/new.items/d1071.pdf), found an abundance of claim denials under appeal that resulted in long delays in the government paying legitimate providers. For example, the report said that one new claims contractor “originally planned on receiving 15,000 appeals cases but actually inherited 46,500 cases, which led to processing backlogs and delayed payments to providers.” Further confirming the problem, the GAO wrote that “CMS underestimated the number of appeals” being reviewed in its system.
The purpose of the GAO report was to gauge how well CMS is implementing a reform of its claims-processing contractors that Congress ordered back in 2003. But the GAO exposed unrealistic expectations on the part of CMS, flaws in the reform process, and an inability of CMS to even confirm whether it can achieve the major goal set out for the reforms – a net savings to the Medicare program.
“Although CMS expected contracting reform to generate substantial savings from reduced spending on administrative functions and savings to the Medicare trust funds due to improved claims review to detect payments that should not be made, as of April 2009, CMS was unable to provide information on total savings,” the report states. “CMS provided some information on savings due to reductions in operational spending, but the extent to which these savings were attributable to contracting reform is uncertain. CMS did not track or provide information on savings to the Medicare trust funds due to reduced improper payments related to contracting reform activities.”
To be sure, the report raises questions as to whether CMS, as currently configured, can effectively implement major program changes without disrupting the services provided to Medicare beneficiaries. Clearly, CMS needs a better understanding of how policy shifts impair stakeholders in the homecare community.
Wilson noted that home medical equipment providers face numerous obstacles when working with the Medicare program, including deep and disproportionate cuts to reimbursement rates in recent years, shifting regulatory policies and many arbitrary decisions related to patient eligibility. These burdens are driving providers out of Medicare, threatening access to care for seniors and people with disabilities who require homecare.
Wilson called on Donald Berwick, M.D., the Harvard professor who has been nominated to be the new CMS administrator, to focus on making the Medicare bureaucracy more efficient and to stop making victims out of legitimate homecare providers.
“The shortcomings at CMS are having an impact on the delivery of quality service and products to Medicare beneficiaries,” Wilson said. “It becomes harder for patients, especially in rural areas, to obtain medical equipment if the only provider for miles goes out of business or can no longer offer a product because the government has created an adverse business climate. Today, CMS is off course. If Dr. Berwick is confirmed, we hope he can right the ship.”
A recent study by the Government Accountability Office (GAO) confirms that the processing of Medicare reimbursement claims for medical equipment providers continues to be a problem despite the government’s efforts to implement reforms. The administrative shortcomings within the Medicare program have caused painful payment delays and other problems affecting medical equipment providers.
Durable medical equipment providers, such as those supplying power wheelchairs and oxygen therapy, have been victims of the Medicare system’s questionable management. They are burdened by excessive audits, claim denials that are routinely overturned after time-consuming appeals, and documentation guidelines that often contradict previous policies. While the Centers for Medicare and Medicaid Services (CMS) cite cracking down on fraud as a rationale for some of these procedures, the way they have been implemented has harmed legitimate equipment providers.
“The homecare community applauds efforts to root out Medicare fraud,” said Tyler Wilson, president of the American Association for Homecare (AAHomecare). “But Medicare beneficiaries and those who provide them with vital medical equipment deserve a more efficient administrative process, one that does not create major obstacles for legitimate businesses that are serving some of the most vulnerable people in our society. This is wrong, and Congress and the administration should put an end to it.”
Wilson noted that the GAO report, “Medicare Contracting Reform” (GAO-10-71, March 2010, http://www.gao.gov/new.items/d1071.pdf), found an abundance of claim denials under appeal that resulted in long delays in the government paying legitimate providers. For example, the report said that one new claims contractor “originally planned on receiving 15,000 appeals cases but actually inherited 46,500 cases, which led to processing backlogs and delayed payments to providers.” Further confirming the problem, the GAO wrote that “CMS underestimated the number of appeals” being reviewed in its system.
The purpose of the GAO report was to gauge how well CMS is implementing a reform of its claims-processing contractors that Congress ordered back in 2003. But the GAO exposed unrealistic expectations on the part of CMS, flaws in the reform process, and an inability of CMS to even confirm whether it can achieve the major goal set out for the reforms – a net savings to the Medicare program.
“Although CMS expected contracting reform to generate substantial savings from reduced spending on administrative functions and savings to the Medicare trust funds due to improved claims review to detect payments that should not be made, as of April 2009, CMS was unable to provide information on total savings,” the report states. “CMS provided some information on savings due to reductions in operational spending, but the extent to which these savings were attributable to contracting reform is uncertain. CMS did not track or provide information on savings to the Medicare trust funds due to reduced improper payments related to contracting reform activities.”
To be sure, the report raises questions as to whether CMS, as currently configured, can effectively implement major program changes without disrupting the services provided to Medicare beneficiaries. Clearly, CMS needs a better understanding of how policy shifts impair stakeholders in the homecare community.
Wilson noted that home medical equipment providers face numerous obstacles when working with the Medicare program, including deep and disproportionate cuts to reimbursement rates in recent years, shifting regulatory policies and many arbitrary decisions related to patient eligibility. These burdens are driving providers out of Medicare, threatening access to care for seniors and people with disabilities who require homecare.
Wilson called on Donald Berwick, M.D., the Harvard professor who has been nominated to be the new CMS administrator, to focus on making the Medicare bureaucracy more efficient and to stop making victims out of legitimate homecare providers.
“The shortcomings at CMS are having an impact on the delivery of quality service and products to Medicare beneficiaries,” Wilson said. “It becomes harder for patients, especially in rural areas, to obtain medical equipment if the only provider for miles goes out of business or can no longer offer a product because the government has created an adverse business climate. Today, CMS is off course. If Dr. Berwick is confirmed, we hope he can right the ship.”
Wednesday, May 5, 2010
Georgia Providers Host HME Tour and Briefing for Rep. Kingston
Barnes Healthcare Services, an HME provider in Valdosta, Georgia and member of the American Association for Homecare, invited Congressman Jack Kingston (R-Ga.) to their facility for a tour and discussion of the merits of H.R. 3790. In attendance for the meeting were Ed Cockman and Ken Goff from Family Healthcare, Tom Riddle for MRS Homecare, Don Bates from Fuller Rehab, Christie Merchant from Merchant Homecare, Hugh Chancy from Chancy Drugs, Jason Jacobs from Sequal, as well as hosts Charlie Barnes III, Charlie Barnes IV, and Robert Steedley of Barnes Healthcare.Kingston has consistently declined supporting legislation to replace the bidding program, comparing it to defense contracts. However, following the tour and discussion, the Congressman did commit to speaking with his health legislative assistant to gain a better understanding of the overall cost savings, how bidding impacts services, and what makes the program unfair for providers.
The congressman also wanted to know more about what the HME sector is doing about fraud and abuse.
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