Tennessee Providers Generate Strong Coverage of Bidding Program

Homecare providers need to raise the profile of the bidding program and the problems it is causing around the nation by engaging their local media. Here’s one recent example of successful media outreach pushing back against the bidding program.

Last week, Gene Ray, Greg Nuckles, and Tom Webb, executives from AAHomecare member companies in the Memphis, Tenn., area helped lead a group of their fellow home medical equipment providers to meet with Cole Epley, a reporter from the Memphis Business Journal to discuss the effects of the bidding program in light of the of Round 2 prices released on Jan. 30.

The result of their two-hour meeting sharing stories with the Epley resulted in a Feb. 8 story in the Journal  that laid out many of the problems that providers and patients are facing in the wake of Round 2:

“Gene Ray, president of Southern Diabetic Supply Co., says the program will simply price him out of business. Presently, Medicare accounts for 99 percent of the company’s revenue, but Ray adds that the ripple effect emanating from Medicare changing its prices will harm other businesses that work with private insurers.

‘Whatever Medicare does, BlueCross will follow,’ Ray says. ‘Competitive bidding means a 72 percent cut in reimbursement for diabetic testing supplies and that means no local providers are going to be available anywhere.’

‘We explained to our staff after the ruling that, after looking at our profit and loss statement, I don’t have room to make up for the loss in revenue,’ Greg Nuckles, COO at The Diabetes Store, says. ‘We’re lean as it is and there are not a lot of line items to cut other than employees. That’s the last thing you want to cut.’

 The program is ‘ill-conceived and poorly implemented,’ according to Tom Webb, president and CEO of Memphis-based VistaCare Health Services Inc., who says that ‘arbitrarily lowering Medicare reimbursement rates’ equates to a ‘de facto way of not providing services.’

‘The fee schedule is already lower than the suppliers’ cost, in many instances,’ Webb says. ‘In response (to Medicare’s actions), private insurers will come back with even lower rates and that’s absolutely scary.’”

Help raise awareness about the disastrous and dangerous effects of the bidding program with your local media. See our 10 Steps to Effective Media Relations primer for basic guidelines on working with the media, or contact Julie Driver or Gordon Barnes for additional insight on generating coverage on the bidding issue.

Hurricane Sandy Highlights "Competitive" Bidding's Danger to Patients

An E oxygen tank isn’t very big and doesn’t weigh very much, so delivering a couple of them to a patient should be fairly easy under normal conditions, but what about during or after a major storm like Hurricane Sandy?

What if the delivery van can’t get anywhere near the patient’s home because the streets are blocked by downed trees? What if the patient lives on the 41^st floor of a building that doesn’t have power?

HME providers along a large swath of the East Coast have faced these and other daunting obstacles in caring for their patients this week. Many providers have the additional difficulty of working out of offices that are themselves flooded, wind damaged, or lacking electricity and phone service.

In general, adversity tends to bring out the best in all of us. HME providers are no exception. They will work to the point of exhaustion taking care not only of their own patients, but also of each other. They’ll coordinate with competitors to make sure that everyone who needs help gets it. As first responders, they are a safety net for people who need medical equipment and supplies at home.

So what big lesson has Sandy taught us? We already knew that preparation is key and that having a back-up plan is essential. What we didn’t know was just how fragile the safety net that we built for our patients is becoming.

And the situation will only get worse if Medicare’s bidding program is allowed to take full effect across the country next year. When businesses are arbitrarily blocked from serving patients, the result is widespread tears in that safety net.

The net, though tattered, is holding together for now. Eventually, however, there will be enough holes that someone will fall through.

Even if Congress is able to ignore the job losses and the increased hospitalization and nursing home costs caused by the bidding program, can they ignore the danger to patients? Does someone actually have to die to get their attention?

If you haven’t yet, call or email your member of Congress today. Ask them to cosponsor H.R. 6490, the Medicare DMEPOS Market Pricing Program Act of 2012. This is a sustainable alternative to the current bidding program: it saves the same money, but without eroding access to cost-effective home-based equipment and care. 

Take just five minutes out of your day and use the AAHomecare Take Action Center. If you have questions, helpful resources explaining the bill and the Market Pricing Program can be found here.

Alan Landauer and Van G. Miller Receive the 2012 Homecare Champion Award

The American Association for Homecare announced today that it will give its annual Homecare Champion Award to Alan Landauer, chairman of Landauer Metropolitan, Inc., and to Van G. Miller, founder and president of the VGM Group.

The Homecare Champion Award recognizes AAHomecare members who have made exceptional contributions to the homecare community throughout their careers. A Homecare Champion embodies the spirit of service and caring that are hallmarks of successful leaders in our community.

In a letter to Landauer, AAHomecare President Tyler Wilson and Chairman Joel Marx wrote, “Your steadfast commitment to the homecare sector, evidenced by your service as president of the New York Medical Equipment Providers Association and as chairman of the American Association for Homecare, are just a few of the significant contributions you have made.” They noted that one of Landauer’s lasting legacies during his tenure at AAHomecare is a stronger revenue base for the Association, which benefits the entire homecare community.

In a letter to Van Miller, Wilson and Marx stated, “Your remarkable entrepreneurial achievements in the HME sector going back to the founding of Miller Medical Supply in 1976, your leadership of two companies that were recognized by Inc. Magazine as among the fastest growing in the U.S., and your founding of VGM Group, which now employs more than 500 people, are just a few of the many qualities that make you a Homecare Champion.”

AAHomecare will present the awards to Landauer and Miller at the Stand Up for Homecare reception at Medtrade next week, which will be held on Tuesday evening, October 16, at Ventanas Rooftop, 275 Baker Street, Atlanta, Ga. 30313.

Please join us for the award ceremony at Medtrade. Register now.

Medicare "Competitive" Bidding Program Designed to Eliminate Competitors

This morning, the House Small Business Subcommittee on Healthcare and technology held a hearing to find out how Medicare's bidding program was impacting small businesses. Tammy Zelenko, CEO of AdvaCare Home Services represented AAHomecare. Here is her oral statement:

"Good morning Chairman Ellmers, Ranking Member Richmond, and members of the Subcommittee. My name is Tammy Zelenko. I am president and CEO of Advacare Home Services, a small business in the Pittsburgh area. We serve about 2,000 patients, with a staff of 49 employees in four locations.

Advacare specializes in respiratory care. We serve patients with COPD or other lung diseases, along with a variety of frail seniors who need help in order to live safely in their own homes. You may know us as providers of durable medical equipment and services, or DME.

 DME is an essential and extremely cost-effective component of our nation’s continuum of care. For a few dollars per day, homecare providers like me enable patients to be discharged from hospitals to home. We help control the nation’s healthcare costs:  DME equipment and services allow Medicare to reap savings by preventing hospital and ER visits and reducing expensive institutional care.

DME represents expenditures of just 1.4 percent of the annual Medicare budget. Falling payment rates and sharply rising regulatory burdens make it extremely hard to continue providing quality services without compromising care. 

As a member of the American Association for Homecare and the Pennsylvania Association of Medical Suppliers, I am very grateful to you for holding this hearing. The poorly designed bidding program has needlessly harmed hundreds of small providers like me and has eliminated 85 percent of providers from participating in the program in the nine areas included in Round One. 

How can we have a truly competitive program if the program is designed to eliminate competitors?

As the bidding program now expands to another 91 areas throughout the United States, small providers face severe cuts and arbitrary exclusion from participating in Medicare. There is no doubt thousands of good providers will be driven out of business as a result of this expansion. With 10,000 baby boomers turning 65 every day, need for cost-effective homecare is rapidly growing. Unfortunately, this bidding program is destroying the infrastructure to help meet that demand. 

In spite of the rhetoric from Medicare about set-asides for small providers, let’s be clear:  This bidding program is anti-small business.  It is a business and job killer.

We do not oppose market-based pricing or a well thought-out auction system. In fact, we endorse an alternative system developed by auction experts who design bidding systems for a living. 

We are often the eyes and ears of the elderly people living in their homes. We create a customized care plan based on physician orders and patient-specific goals and we communicate critical information to the physician.  This is what enables patients with acute care or chronic needs to remain in their homes—safe and independent.

However, there are costs to providing this level of care. These are not simple “commodities” we are providing.

As a small business owner, I have been able to compete against the local, regional, and national providers within my market. Each year I gained market share, grew my business, and received recognition due to the outstanding service that my company provided.

But all of that changed overnight when the bidding program went into effect. The bidding program, for me and thousands of providers like me, has created the biggest barrier to my company’s survival.

The government should not ration benefits or otherwise bar qualified providers from serving Medicare beneficiaries.

As I prepared for the bidding program, I made my business as lean and efficient as possible. I invested in electronic medical records, purchased GPS tracking devices, and invested in a new billing system.  I believed these changes would prepare us. I was wrong.

This is the first year that I did not grow my company. The first time that I had to pass all of the healthcare premiums increases on to my employees. And the first time I had to limit reimbursement for continuing education.

Before the bidding program began, my company competed based on the level of service we provided through education, clinical assessment, and follow up. But now, because of severe design flaws, this bidding system has eliminated my opportunity to compete in my communities where I have invested in physical locations, inventory, vehicles, and highly trained staff.

In closing, more than 200 economists and auction experts have warned CMS that the current bidding program will fail if significant modifications are not made. These experts designed an alternative called the Market Pricing Program. It achieves sustainable, market-based pricing. It preserves access to quality care. AND it gives small providers like me a fighting chance for survival.  

Please give us that chance by enacting the Market Pricing Program.  

Thank you."

Does the Left Hand Know What the Right Hand is Doing?

According to the Census Bureau, the number of Americans aged 65 and older grew by 900,000 between 2009 and 2010. For the same year, the American Health Care Association reported that the number of nursing facilities in the United States dropped by nine. Granted, nine isn’t a very big number, but why is the number falling at all when our population of older people is rising so dramatically?

A recent article in the New York Times explains that this odd discrepancy is in part a result of financial pressure on facilities that care for residents who receive Medicare and Medicaid. The other part is a growing consensus among health care professionals that the 24-hour care provided by nursing homes is more than many older patients need.

So where are these patients getting the care they do need?

Some combination of community- and home-based care seems to be the answer. As Jason A. Helgerson, the Medicaid director for New York State says, “If a person can get a service like home health care or Meals on Wheels, they can stay in an apartment and thrive in that environment, and it’s a lower cost to taxpayers.”

Examples of federal government support for this shift are the Community First Choice Option for Medicaid and the Independence at Home Demonstration Program for Medicare.

States that participate in the Community First Choice Option receive a six percent increase in federal Medicaid matching funds for providing community-based attendant services and supports to beneficiaries who would otherwise be confined to a nursing home or other institution. The Independence at Home Demonstration Program encourages primary care practices to provide home-based care to chronically ill Medicare patients.

If all of this is true, then the question of the day is, “Why is the federal government gutting the home medical equipment (HME) sector?”

People who are chronically ill or who have mobility issues need more than care to remain independent and safe at home. They also need medical equipment like oxygen concentrators, wheelchairs, and infusion pumps.

According to information gathered by the American Association for Homecare, VGM, and other groups in the HME sector, more than 450 HME providers have closed locations, been sold to other companies or gone out of business entirely since the Centers for Medicare and Medicaid Services (CMS) implemented its bidding program in 2011.

Ostensibly designed to cut costs, the program has in fact made a mockery of market-based capitalism. A forced contraction in a sector that is experiencing increased demand defies logic. Add to that CMS’ claim that patients aren’t experiencing any negative effects, like reduced access to equipment and service, and your average reasonable person has to start wondering what the true goal of the bidding program really is.

However, before we subscribe to any sort of conspiracy theory, it might be worthwhile to keep in mind an adage that goes back at least as far as the 1700’s: Never ascribe to malice that which is adequately explained by incompetence. Or, in other words, does the left hand know what the right hand is doing?