Local Businesses Across the Country Weighing Options in Anticipation of July 1 Cuts

Just a day away from the July 1 cuts, AAHomecare is receiving information from from suppliers across the country who are faced with tough business decisions that will hurt patients.

Sandwich, Massachusetts
As a result of Medicare's application of competitive bidding-derived prices in rural markets, Cape Medical Supply, Inc. in Sandwich, Mass. announced they will no longer accept new patients on Nantucket Island.  As the only respiratory care provider for this market, Gary Sheehan, president and chief executive officer for Cape Medical Supply, said, “it was not a decision we took lightly; however, a 52% reduction in reimbursement was simply operationally unworkable for us.” 

You can read more about what brought this company--that has provided service to Nantucket beneficiaries for 30 years--to this difficult decision in this impassioned blog post from Sheehan.
 


Bangor, Maine
In Maine, WABI Channel 5 reported on the issue and interviewed Coastal Med Tech’s CFO, Cathy Hamilton:

“The industry is seeing business closures all over the country right now as a result of these cuts both in metropolitan and in rural areas because people have had trouble, even sustaining the January cuts,” Hamilton told the station.

The story cites rates portable oxygen rental reimbursement going from $40 a month to $18 a month following the July 1 cuts as one significant example of the reductions they have to deal with.

Coastal Med Tech is weighing its options, including possibly cutting back on delivery service, leaving patients waiting longer for items or making them come into their stores themselves.

The station also interviewed Karyn Estrella, President & CEO of the Home Medical Equipment & Services Association of New England, who added  “In rural Maine, it is not unusual for a company to drive an hour one way to deliver equipment and that’s all included in the reimbursement”

You can watch the full report and interview with Cathy Hamilton here.

Minden, Louisiana
In Minden, Louisiana Andy Fish, co-owner of Minden HomeCare Equipment, shared with AAHomecare that due to the cuts they have already experienced in rural Louisiana, the company is no longer able to provide manual or power wheelchairs. Minded HomeCare was formerly able to provide equipment with same day service, but now they will have to wait until there are more than one delivery going in the same direction, and if patients have a bill they will now have to pay up front when the items are delivered. This is a new practice for the company, who used to work with patients and allow them to pay a little now and a little each month. Many patients are required to come pick up most of their items rather than having them delivered.

“We hate this, we started this business in 1998 to help the people in this area,” Andy explains. “We know almost everyone that we go to church with and see them in Walmart or the grocery stores.”

He went on to explain they no longer offer TENS units, full electric hospital beds (now only semi), nebulizer supplies, or canes through Medicare. Patients are asked to pay cash for those items and if a deductible is remaining the patient cannot receive supplies until it is met. The company has had to downsize their staffing and can no longer support school and civic organizations financially as they have in the past. The cuts have taken a toll on the homecare company.

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If your company is making difficult business decisions based on these latest cuts, please share your story with Tilly Gambill at tillyg@aahomecare.org so we can document real examples of why competitive bidding rural relief legislation is critically needed.

Clock is Ticking for Home Medical Equipment Providers

C.N.Y. Medical Products is one of many home medical equipment (HME) companies in New York, and across the country, who did not receive a contract in the Centers for Medicare and Medicaid Services (CMS) competitive bidding program. “We have a large retail store and when Medicare customers come in we have to turn them away. It makes no sense!” says Lynn Komuda, vice president of C.N.Y. Medical Products in Syracuse. “I have a sense of shame having the equipment right in front of them and telling them they have to pay out of pocket if they want to support their local vendor.” Komuda said she even has to turn away her own family, friends and neighbors because they live in these bid regions.

At the heart of the problem is preserving services and equipment to individuals and the elderly with severe disabilities, as well as the livelihood of local and county businesses and residents. HME providers like C.N.Y. Medical Products, care for the medical needs of millions of Americans who require oxygen equipment and therapy, mobility assistive technologies, medical supplies, inhalation drug therapy, home infusion, and other home medical equipment, therapies, services, and supplies in the home.

But the clock is ticking. The first phase of implementing new reimbursement cuts, set by applying pricing from CMS’ competitive bidding process to rural areas not previously covered by the program, took effect January 1, 2016. And just a few days from now, on July 1, 2016, a new round of deep cuts for HME providers in these rural areas will take effect. The HME community feels strongly that these further payment cuts to rural areas will decimate the HME safety net that supports some of America’s most vulnerable patient populations.

C.N.Y. Medical Products was started in 1981 by John and Lynn Komuda. Over the years the company has employed family, friends, and neighbors. They have had as many as 35 employees but due to continuous cuts to Medicare payments, the company has had to reduce staff to 16, yet continue to cover 22 counties in New York State—the majority of these counties will have Medicare payments for HME reduced again, by 25-30% come July 1.

The American Association for Homecare and many consumer groups and partners in the HME community believe six months to monitor for disruption in Medicare beneficiaries’ access to DME items in rural areas is not enough time. Several factors come in to play when considering the cost of providing HME to rural areas of Texas, such as:

·      Employee time, fuel costs, and mileage to drive to the beneficiary’s residence

·      Widely ranging geological and road characteristics that could require specialty vehicles, including 4-wheel drive, ATVs, tractors, and more sparsely populated areas that don’t offer the same routing efficiencies as dense urban areas

We believe this program will have a devastating effect on HME providers in New York and across the country, as well as for the elderly and severely disabled patients they serve in these communities come July 1. To learn more, visit www.aahomecare.org/issues/competitive-bidding.

We Can and Must Do Better!

Guest columnist Dr. Susan Biener Bergman, is a physiatrist in Massachusetts who has been in practice for 31 years and offers a unique perspective on competitive bidding and watching her patients’ health decline and time tested resources slowly disappear. Her call to members of Congress—We can and must do better!

My patients are people with multiple chronic conditions, including paralyzing disease or injuries. I have known some since their original injuries dating back decades. Until recently many were living independently with the help of high and low tech equipment, as well as personal care attendants funded by MA Medicaid or devoted family members working without pay. The rehabilitation model developed in the Spinal Cord Injury Model Systems from the 1970's worked very well, offering people education about their conditions, engagement in preventing complications and a satisfying life.

Creative thinking allowed people with catastrophic injuries and illnesses to live in the community, raise families and work, often at very high level jobs. The right equipment and supplies prevented predictable complications like infections and pressure sores. The key pieces of equipment- properly sized and fitted wheelchairs with controls set to maximize independence and low air loss mattresses to reduce pressure and prevent bedsores seem costly at first, but more than paid for themselves in reduced complications, fewer ER and hospital visits, lower costs and lower patient mortality rates. Over the years as businesspeople and legislators searched for ways to cut burgeoning costs, slowly but surely clinical decision making has shifted from trained clinicians to people with no medical experience and even to algorithms and machines. The results have been disastrous.

While U.S. health care costs skyrocket, small local medical equipment vendors and suppliers are being gobbled up, consolidated and forced out of business. Thousands of jobs have disappeared. Even spending hours on prior authorization paperwork I am no longer able to get my patients wheelchairs that fit, proper urologic and wound care supplies, non-opiate pain medications, appropriate braces and prostheses or even pressure relief mattresses to prevent bedsores. People I have known for years are literally dying. Trusted professionals with years of experience are retiring early or closing their business because they are undercut by large high volume equipment suppliers who can bid low and make up their losses on materials or by cutting staff. In theory competitive bidding works; in practice we get cookie-cutter services of inferior quality that don't fit properly or don't work. People with disabilities feel the effects every day. So do the small brace shops, wheelchair vendors, specialty bed companies and medical supply companies that have served them well for decades. Even doctors are forced to practice corporate medicine- either conform or drop out. There aren't enough doctors to meet the need.

The combined results of efforts to centralize, standardize, automate and digitize health care have left us with a fragmented system run by people whose expertise is in management, not medicine. Laws passed by well meaning legislators are parsed and micromanaged to "maximize efficiency." The system is running on autopilot with little variation or creativity. That's very bad news for people with disabilities and for small businesses. For example, hospital bed vendors have pulled out of the home care market so a person who needs a specialty bed is forced into an institution. Even they have to wait weeks.

People are left high and dry without the tools they need to take care of themselves. Our current health system is not working and costs are higher than ever. We can and must do better.

Deadline for Rural Relief Legislation Enters Final Month

The HME community is apprehensively counting down until July 1, the deadline for implementation of phase II of CMS’ flawed competitive bidding process to non-Competitively Bid Areas (CBAs). Congress must act now to stop the spread of bidding to additional rural areas and keep this program from further decimating the home medical equipment safety net that supports some of our most vulnerable patient populations. Why Is This Program Detrimental? Phase I of the reimbursement adjustment took effect on January 1, 2016. And just six months later, phase II is expected to begin, however the American Association for Homecare and many consumer groups and partners in the DME community believe six months to monitor for disruption in Medicare beneficiaries’ access to DME items in rural areas is not enough time. Rural America has unique attributes with distinct costs that differ from their urban counterparts. The HME Industry has convincing data that indicated providing DME items in rural areas have higher costs in order to access, care for, and support non-urban and rural beneficiaries, which are not accounted for in the regional single price amount, such as: ·      Employee time, fuel costs, and mileage to drive to the beneficiary’s residence ·      Widely ranging geological and road characteristics that could require specialty vehicles, including 4-wheel drive, ATVs, tractors, snowmobiles, ferry coordination, and more Sparsely populated areas that don’t offer the same routing efficiencies as dense urban areas ·      Suppliers in non-CBAs will not have economies of scale to offset the drastic payment cuts. In CBAs, suppliers try to offset the significant payment cuts through increased volume of beneficiaries while supplementing payments with serving markets outside the CBA. However, under this forthcoming mandate to expand the program nationally, suppliers in non-CBAs will receive the same drastic payment cuts set in CBAs, without exclusive contracts and increase in volume of business or the ability to compensate with higher rates outside of the CBA. What Can I Do? AAHomecare is calling on the HME community to commit to making every effort to encourage Congress to support legislation for rural relief—The Patient Access to Durable Medical Equipment (PADME) Acts, H.R. 5210 and S. 2736.  As we head toward the critical final weeks that will decide the issue, our consumer and industry partners are helping to bolster our endeavors with letters of support. A joint letter from national and state associations in support of PADME explains that little independent analysis of the competitive bidding program has been done to evaluate whether the program has “restricted the types of products available for patients or compromised physician decisions to prescribe specific products…”  The ITEM Coalition has endorsed H.R. 5210, and the National Federation of Independent Businesses has weighed in with letters supporting both the Senate and House bills.  We encourage you to share these letters with your Congressional members as examples of support from patients and industry associations.  You can also share maps showing rural, regional, and CBA areas in your state. The HHS OIG also released a chilling report confirming that CMS awarded unlicensed bidders to receive contracts in Round Two (more details in next story), that can also help you make the case that current Round 2 rates that helped determine bidding prices for some rural and non-bid regions are based on winning bids from unqualified bidders. Each of these are powerful tools in your arsenal to fight for rural relief legislation and help swell Senate & House co-sponsor rolls.  We encourage you to use everything at your disposal in these final days to help us push legislation into a vote.   Are your Senators and Representative on the list? New House co-sponsors in the last week: Rep. Jeff Fortenberry (R-Neb.) Rep. Kurt Schrader (D-Ore.) Rep. Pete Visclosky (D-Ind.)  Rep. Ed Whitfield (R-Ky.) Rep. Chellie Pingree (D-Maine) full House co-sponsor list (total: 72) New Senate co-sponsors in the last week: Sen. Tammy Baldwin (D-Wisc.) Sen. Mark Kirk (R-Wisc.) full Senate co-sponsor list (total: 29)