'Medicare is dying'

SAN ANTONIO - Provider Tony Davila's revenues are down from last year, but he's doing just fine, thanks.

That's because the president of RN Plus Medical Supplies has actively started pursuing managed care contracts. The result: Medicare now comprises about 20% of his business, compared to 100% a year ago.

"I have dry erase boards with the payers we are targeting," said Davila. "We are showing them how we can save them money."

RN Plus offers diabetes and incontinence supplies, and therapeutic shoes.

It's the shoes that have the managed care payers taking notice. That's because properly fitted shoes and custom inserts can go a long way toward preventing diabetic foot amputations, said Davila.

"A little abrasion on the foot can cause an avalanche of clinical issues," said Davila, a pedorthist. "The managed care organizations know (spending money on preventative measures) might prevent a $50,000 amputation. Medicare's (attitude) is 'We can't spend any more money.'"

RN Plus currently fits between 80 to 100 pairs of shoes per month--down from 125 pairs a year ago. Reimbursement is also lower than what Medicare pays but, despite the decrease in income, there's an upside, said Davila.

"I don't have to jump through all these hoops to obtain physician documentation," he said. "Medicare has gone overboard with documentation. It's a much smoother program."

HME providers eyeing "alternative contracts" can be successful, says industry consultant John Allman, but they need to set realistic goals.

"They have to start small," he said. "There are lots of smaller local and regional players they can work with. They are not going to be Apria and get a nationwide deal."

For Davila, managed care is the wave of the future.

"Medicare is dying," he said.