Moving the HME Industry Forward


Last Minute Loss of Legislation Means Trying Times Ahead

June 27, 2016

BIRMINGHAM, AL – The last minute loss of legislation needed to prevent the scheduled Medicare rate cuts, not because of opposition, but by circumstances over which we had no control, may very well mean the death of our industry as we know it—but was it murder or suicide?

For many years, industry experts and veterans, including this writer, have advised everyone who would listen to avoid being a Participating Provider, maintaining the right to accept assignment on claims or not one claim at a time.

And since the middle of the Polk County, Florida, competitive bidding demonstration project, it has been very clear, based on statements made to the Legislative Conference by a senior CMS official (that another statement often made in the same context was true): So long as assignment remains voluntary, and the rate of assigned claims stays above 90%, it will be impossible to convince CMS that we are being underpaid.

Look at this statement, which was included in the CMS announcement of the July 1, 2016 rate cuts: “CMS has been closely monitoring claims and health outcomes data to verify that beneficiary access to quality items and services in Non-Competitive Bidding (NCB) areas continues under the adjusted fee schedule amounts. The data released thus far from 2016 indicate that suppliers are continuing to accept assignment of almost every claim, accepting the revised rates established [emphasis added] in January 2016 as payment in full for furnishing the items and supplies. Health outcomes data has also been posted and shows no negative impact as a result of the revised rates established in January 2016.”

Most providers have obviously continued to meet patient needs as best they can, even as reimbursement shrunk. After the next round of cuts, in my opinion, it will be impossible for the affected providers to keep serving any substantial percentage of Medicare patients without collecting an increased amount from beneficiaries, or someone who will pay on their behalf.

CMS continues to insist that access has not and will not be affected. After the July 1st rate cuts, I believe that access will require either cash or great patience, possibly both. If that happens, we should be able to get some changes made soon enough to prevent the death of our industry.

Remember, the 2003 law that created this “competitive acquisition” program wasn’t intended to save money so much as to find a sustainable rate-setting methodology that would protect the trust fund without decimating the industry. We need to keep reminding Congress of that issue. The industry has always been willing to accept market prices, but that’s not what we are getting from the current program.

Michael Hamilton is executive director of the Alabama Durable Medical Equipment Association.