By Brian Kelly
One would think the loss of 15 jobs and the closure of four of our nine medical equipment showrooms here in Wisconsin, is the result of an economic downturn or a slowdown in our industry. The cause is a misapplied government program that is leading to less access to care, reduced quality of care, and higher out-of-pocket costs for seniors and people with disabilities that rely on Medicare.
Based in and around U.S. House Speaker Paul Ryan’s congressional district, our company employs over 500 hard-working and committed individuals who provide a wide range of medical services and supplies to our friends and neighbors in 23 counties across south central and southwestern Wisconsin. An important segment of our business is providing home medical equipment and quality service to seniors on Medicare.
Across the country many rural medical equipment suppliers like us could soon be closing their doors, laying off more employees, and leaving patients with limited options and poor service. This is the result of Congress’ failure to resolve a problem created by the recently-instituted competitive bidding process on home medical equipment. Its objective is to save taxpayer dollars, an important initiative, but it has failed on multiple levels.
The competitive bidding process was originally designed for use in urban and suburban areas, but this year, the Centers for Medicare and Medicaid Services (CMS) began applying rates from the bidding process in major metro areas to rural communities throughout the United States. The initial results from a first round of cuts saw a 20 to 25 percent decrease in reimbursement to rural providers for many items starting in January of this year. These reductions caused significant disruption for home medical equipment providers and patients. Despite these problems, CMS applied a second round of similar cuts for rural communities on July 1 that have now reduced reimbursement rates by 50 percent or more when compared to the prices in effect in 2015.
The urban and national companies making the bids that set reimbursement rates often times specialize in one product – hospital beds or oxygen supplies for example. In the small towns and communities Home Health United serves, we do not have the volume or conveniences of urban delivery routes to support these lower rates. To make our business work in rural communities we have to provide multiple product lines and travel many miles to deliver a single unit.
We have closed showrooms in Johnson Creek, Portage, Platteville and Madison, a significant inconvenience for countless seniors who now have to drive farther. Seniors in rural areas tend to be much older than beneficiaries in urban areas, which makes longer travel times that much more significant. Given the added travel and higher out-of-pocket costs for seniors, many Medicare beneficiaries are deciding not to purchase the medically necessary products for their home care
Congress had a chance to pause the second round of cuts to allow for further study of the impacts on patients in rural communities, but the House and Senate were unable to reconcile different versions of legislation before they recessed in July. Wisconsin home medical equipment providers are counting on Speaker Ryan to help break the impasse and make sure seniors and people with disabilities continue to get the home medical equipment they depend on.
Brian Kelly is the vice president of Home Medical Equipment & Infusion Services for Home Health United, Inc., based in Madison
This story appeared in the Sept. 12, 2016 print edition of the Janesville (Wisc.) Gazette