Broad brush Medicaid approach is devastating to rehab

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Monday, March 31, 2003

For the next year or so, I expect increasing frustration in securing Medicaid funding for rehab mobility systems. Many states are in the midst of the most severe budget problems since the Great Depression and are moving quickly to mitigate ever widening deficits. As many readers know from past experience, “broad brush” approaches to Medicaid cost reduction can have devastating consequences for rehab. For purposes of this commentary, “rehab” will connote the provision of specialty and custom mobility systems.

Astonishing as it may seem, many of the state level bureaucrats have yet to understand the uniqueness of rehab. Too often, they make decisions with little or no cognizance of the necessarily distinct business models of typical respiratory/DME providers and high end rehab providers. It’s not that one is more vital or more important than the other – they’re just different. Rehab simply has dramatically higher costs in process and labor apart from the actual hard goods. Rehab providers dealing with the complex population of Medicaid simply cannot obtain even as high as a third of the operating margin of the major respiratory companies - yet we are treated in the same manner by the states. In many states a 10% cut in reimbursement would be a hiccup for the respiratory providers but devastating to the rehab providers and the population they serve.

Rehab providers and equipment manufacturers are not equipped politically and financially to respond to the many “brush fires” that are emerging.

One pattern that I have seen emerge in multiple states is what I call the big “slowdown.” We are experiencing much greater difficulty in obtaining prior authorizations than in the past. Our offices are peppered with increased requests for additional information - most often it is for irrelevant information - and it seems that it is just being done to slow up the approval process. I’ve often said. “One doesn’t kind of need a wheelchair.” So we are now seeing four-to-eight-week increases in the prior approval process in some states. It creates angst with our employees, end-users, parents, caregivers, therapists, etc.

We are also seeing an even more draconian trend - I’ll call it “revisionist coding.”

A good example is in pediatric walkers. Most states have no codes for these walkers and always authorized and paid for them with utilization of a miscellaneous code. Recently, we’ve been informed by several states that we cannot use this code anymore and must use the standard walker code. The problem is that the code doesn’t even cover direct acquisition cost. Furthermore, these decisions were made with no dialogue with the rehab provider community. They talked to DME providers, but these providers didn’t understand the adverse impact this would have in the pediatric population.

I expect things to get worse before they get better. I am frustrated because it shouldn’t be happening. As best as I can determine, the cost of providing pediatric rehab doesn’t add up to even 1/10th of 1% of a typical state’s Medicaid budget. Moreover, about 60% of it is reimbursed by federal funding. I really don’t think the bureaucrats, lawmakers and particularly the taxpayers want to endanger the disabled pediatric population. It’s inadvertent because our industry has done an extraordinarily poor job of differentiation.

Do you really think any lawmaker wants to stand against disabled children getting wheelchairs? Do any of them want to deny these children access to an education? Do you think any lawmaker wants to stand against accreditation? Of course not!

Let’s face it, the focus of NAMES, and now its successor, AAHomecare has been on Washington and the Medicare program. In recent years it’s been on coding. Necessary? Yes. But historically, the rehab message has been consistently diluted because these associations represent other larger and more profitable constituencies. There simply has been no systematic and coordinated political effort at the state level. It has always been a “reinvent the wheel” scrambling process each time a serious problem pops up in a state and it has usually been just providers doing the work. If just 20% of the time, energy and money that has been expended at the federal level had been applied this commentary would be moot.

As an industry, providers that are stakeholders with the Medicaid population need to pull themselves together in a new coalition with manufacturers and caregivers to start prosecuting an aggressive agenda with the states. We need to combine the elements of good public relations and political lobbying to put a face on this business that is distinct and separate from the other DME and homecare businesses.

Let’s get busy! HME

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