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)

New OIG Report Raises More Questions About Competitive Bidding

The Office of the Inspector General (OIG) for the Department of Health & Human Services released a report that raises more concerns about the Centers for Medicare & Medicaid Services’ (CMS) ill-conceived competitive bidding program for home medical equipment.

Looking at contract suppliers in Round 2 of the bidding program identified in complaints from the supplier community and congressional inquiries, the OIG focused on 146 unique contract suppliers that may not have been properly licensed in states requiring licensure for companies providing home medical equipment.

In that group, the OIG found that “63 suppliers did not meet licensure requirements for some of the competitions for which they received a contract. Additionally, 14 suppliers need to be further researched by CMS and its contractors to determine if they met or had not met licensure requirements.”

“The fact that it took two years to get this report just solidifies our view that CMS can't evaluate the patient impacts caused by recent deep cuts for rural providers in just six months before plowing ahead with a new round of cuts on July 1,” said Tom Ryan, president & CEO of AAHomecare.  “That’s why we need Congress to step in and make CMS take the time they need to properly evaluate this program.”

“CMS has dragged its feet on implementing provisions passed in Congress last year that would require CMS to better enforce their own rules requiring that bidders are properly licensed in states requiring licensure,” Ryan continued.  “This isn’t the way to run a program that impacts home medical equipment providers nationwide, and the millions of patients that depend on the essential products and care they provide.”

These revelations come as Congress considers legislation requiring CMS to better assess the direct impact of the recent round of price cuts for patients in rural areas before a new round of deep cuts take effect on July 1.  Current Senate and House legislation, known in both chambers as the Patient Access to Durable Medical Equipment Act (S. 2736 and H.R. 5210), would delay the latest cuts for 15 months and require CMS to report their findings on patient access issues on a regular, transparent basis.

“The message is clear,” concluded Ryan. “The bidding program needs serious examination before it causes further disruption for both providers and patients.”

The OIG's summary and full report can be found here.