Brainstorming a new Medicare for HME

Saturday, January 31, 2004

YARMOUTH, Maine - You want to see some excitement? Take 10 HME providers, lock them in a room, and tell them they can’t come out until they decide how to revamp, or not revamp, Medicare reimbursement for durable medical equipment.

In response to the recent Medicare Prescription Drug Act that hit durable medical equipment with a bevy of reimbursement cuts, January’s HME News Poll asked that question. Ninety-seven people responded - 20% preferred to keep the existing reimbursement system; 27% advocated restructuring the fee schedule; 4% favored some kind of capitation arrangement; 49% supported unbundling the fee schedule.

Of the dozen or so who included written comments with their checked preference, the sentiments ranged in tone from fatalistic to critical to pragmatic to downright irate.

“Change is going to happen in the industry and so continuing to just fight all changes is not productive,” wrote Wade Brehm from Houston, Texas.

Avoid unbundling services from equipment as that will lead to much lower pricing and create even more billing complications, he continued. On the other hand, an industry-oriented restructuring should include significant incentives to encourage providers to compete on price as well as service in order to avoid competitive bidding.

Commented Robert M. Arado, owner Caremed Respiratory Services in Tampa, Fla.: Industry opposition to cuts “has not worked, does not work and will not work.” As long as industry fraud continues to hit the headlines, it’s pointless to lobby elected officials. He recommended a reimbursement scheme that varies based on the equipment and clinical needs of the patient.

With only four years of industry experience under his belt, Jeff Storm acknowledges others have more insight into DME reimbursement. That said, increasing competition may improve service.

“As a salesperson I think there are way too many companies out there competing for business,” continued the American HomePatient account executive. “There is so much mismanagement and waste in this industry it continually astonishes me. Competent organizations can be profitable despite the impending cuts. The referral sources don’t really care who’s taking care of their patients as long as the patients are receiving good care.”

Several respondents urged industry leaders to continue efforts to educate lawmakers to the benefits and cost-effectiveness of homecare/HME and to the realities of hardworking independents.

“It is time we faced them with facts and not predictions and unsubstantiated assessments of our value,” wrote Joel Holland president of Holland Medical Equipment, Nashville, Tenn. “I am sure that most small HME companies would be willing to prove to Congress that they are not making exorbitant salaries or profits. We need to present facts and statistics that can be backed up with hard irrefutable information. Lincare is an anomaly. The entire industry should not be punished because of one isolated example.”