Expect a mixed bag in 2017, respondents say

Friday, November 18, 2016

YARMOUTH, Maine – Respondents to a recent HME Newspoll are split over whether 2017 will be a better year for the HME industry, with 51% saying they expect market conditions to worsen and 49% saying they’ll improve.

2017 will be the year of consolidation and closures, according to one respondent. 

“My company has already laid off 20% of its workforce and closed five of the 65 locations we have,” the respondent said. “We are looking to close an additional three locations in 2017 and lay off another 10% of the workforce. All these closure are in rural markets.”

A number of respondents cited shrinking reimbursement rates and the rollout of competitive bid rates to rural areas as a major concern, along with the “monkey see, monkey do” effect on non-Medicare payers.

“Now that most insurance companies have rolled out new fee schedules based in whole or in part on the Medicare competitive bid rates, there is not reason to think they’ll ever go back to higher rates,” said one respondent.

Others are more optimistic, saying 2017 will be a “comeback” year now that reimbursement rates have finally hit rock bottom.

“I know I’ve been saying this for years, but I seriously don’t see how it can possibly get any worse,” wrote one respondent. “We are finally getting some traction in Congress.”

In light of the fallout from competitive bidding, some say the industry will experience a period of stability as providers restructure by offering new cash oriented products and service lines that have been developed over the last few years.

It’s also impossible to look ahead without considering the implications of a Trump presidency on the HME industry. Many, like Laurence von Euw, manager of Lockport Home Medical in Lockport, N.Y., are encouraged by the president-elect’s business-friendly platform.

“Trump’s campaign ran on promises of lower taxes, including decreasing corporate tax rates to about 15% from the current 35% rates, and doing away with onerous regulations on small business,” said von Euw. “This will increase retail sales.”

Meanwhile, Ricky Hubbard, general manager of Zurcare in Starkville, Miss., which is slated to close its doors Nov. 30, says 2017 will be a mixed bag.

“With the nomination of a new Republican president and Congress’ intentions to repeal or replace Obamacare, the HME industry’s future is looking up,” he said. “However, I do not believe there will be improvements above and beyond the cuts we received in January 2016. I also believe that the current policies CMS has in place, including the audit process, will not change in HME’s favor.”