A New Year is upon us. Are you ready?

Wednesday, December 22, 2010

The New Year will bring an all too familiar set of challenges to HME providers. When fully implemented, most of these will result in reduced reimbursement or greater administrative and paperwork burdens of one type or another. That old adage "the more things change, the more they stay the same" aptly summarizes HME providers' recent experience with Congress' and the administration's mandates. My impression, overall, is that providers do their very best to keep up and respond to each new initiative. In two very important areas, however, providers seem to be unprepared.

First, providers are only now beginning to understand the insidiousness of the administration's aggressive new program to identify and recoup government overpayments. Despite their best efforts to respond to the rules, regulations and policies that Congress or CMS throw at them, providers are simply not ready for the flood of pre- and post-payment audits they are wading through now. Second, another much older and more familiar initiative that requires close attention is Medicare's program for national competitive bidding. While most providers have some basic knowledge about the program and its deadlines, very few, it seems, have a good sense of how they will change their businesses in an environment that includes competitive bidding.

Alphabet soup of audits

Consider the alphabet soup of audits. If your company received an audit letter in 2010 from the MACs, CERTs, ZPICs or RACs, expect more. If you ducked audits in 2010, 2011 will not likely be as lucky. Many suppliers don't understand the basis for these audits or when and how they must respond. Everyone understands that contractors' underlying mission is mostly the same: prevent, detect, and recover improper Medicare payments. In these recent audits, there is a chasm between providers and CMS on what constitutes an "improper" payment.

What is troubling is not only that there are more audits or that they seem to occur in closer succession. What is truly disturbing is that contractors seem to be expanding the level and scope of documentation required to prove Medicare payment and coverage for DMEPOS. That is, providers are being asked to document matters that are outside the scope of the coverage policies. CMS has permitted its contractors to make ad hoc reimbursement cuts and coverage reductions for DMEPOS items by way of pre- and post-payment audits.

This New Year you must resolve to confront this challenge. On a national level, support AAHomecare, which has formed an audit task force to address these issues. Individually, know that while there is no explicit requirement that you obtain documentation as part of your intake process, you might be at risk if a referral source is uncooperative when you are audited. Know the elements of coverage for the DMEPOS items you furnish. If the audit request is for documentation that is not required for Medicare coverage, be prepared to appeal an overpayment determination through the ALJ level of appeal. This is burdensome, but absolutely essential for your own bottom line and to drive home the point that contractors have overstepped the boundaries established in coverage determinations.

shape-shifting competitive bidding

In 2011, consider what your business might look like in an environment where competitive bidding is the norm. This is not a forecast of whether or when--or how--the political issues surrounding competitive bidding will be resolved. Instead it is a question that providers need to be asking themselves. It's an opportunity, really, to consider and possibly even to shape what home care will look like tomorrow. Bear in mind that, even assuming competitive bidding is ultimately repealed, whatever replaces it will surely require providers to make equally difficult choices.

Data points to very solid prospects for home care. Boomers are aging and no one, especially federal or state governments, wants to bear the cost of institutional care for the elderly or disabled. Successful providers I know share one important trait: their adaptability to changes in the business climate. I have been impressed by the resiliency and innovation the HME community has shown in response to other seemingly daunting government policies. There is nothing to suggest that will change in 2011.