Mass. providers fight to keep secondary discounts, co-pays

Thursday, February 28, 2002

BOSTON - Re/hab providers in Massachusetts say they're re-living a nightmare.

In July 2000, providers fought to keep secondary discounts for 2001 - and they won. If they got a claim paid within a manufacturer-determined time frame (i.e. 30-90 days), they got an additional discount, up to 25%. (Providers in Massachusetts are reimbursed based on acquisition cost plus 40%.)

But because the victory came in the form of an outside amendment to the budget, secondary discounts were up for debate again this year. And due to state budget cuts, the discounts have been left on the cutting room floor. As of Jan. 1, providers were forced to turn the discounts over to the state.

Re/hab providers say they're stunned. The loss has hit them the hardest because the equipment they sell is among the most expensive and the hardest to deliver and provide promptly.

"It's a big loss," said Karyn Estrella, executive director of the New England Medical Equipment Dealers Association (NEMED). "In some cases, we're talking a 25% reduction to a re/hab provider's bottom line."

Estrella said as if that weren't enough, the state has also cut co-payments for Medicare/Medicaid beneficiaries, if the amount paid by Medicare is greater than Medicaid's allowable.

Late last month, NEMED and providers were to present a position paper to the Legislature. In it, they ask the Legislature to address the following:

- Emergency legislation reinstating the secondary discounts and co-payments;

- A long-term reimbursement correction, such as changing the payment methodology to manufacturer's suggested retail price less a discount of 20%. (A consulting firm commissioned by that state recommended Massachusetts make this move in 1999.); and

- Update the fee schedule, which is based on 1993 manufacturer invoices. HME