NewsPoll: Providers scale back on Medicare

Thursday, November 3, 2011

YARMOUTH, Maine - Reduced reimbursements, audits and paperwork requirements have pushed many HME providers to cut back on Medicare in the past year, according to a recent HME NewsPoll. 

More than half of the 108 respondents to the November HME NewsPoll (57%) reported decreasing their Medicare business in 2011. 

"Competitive bidding has really hurt our business," said one provider. "The 32% reduction in reimbursement has been very tough on us." 

When it comes to competitive bidding, however, one provider's loss is another provider's gain.

"We won the competitive bid in the Pittsburgh area," said Bob Shellenberger, manager of North Huntingdon, Pa.-based QualiCare Home Medical. "As a result, we have seen a 10% increase in Medicare patients in the first two quarters of 2011."

Even outside competitive bidding areas, reduced reimbursements are taking their toll on providers, forcing them to drop certain product lines for Medicare. 

"We have given up respiratory service," said one provider. "As the payment rates drop, it is not possible to support an RT and 24-hour on-call service."

Providers are also dropping product lines that are frequently audited. One provider of therapeutic shoes terminated his supplier number after hearing that a local competitor had to repay $700,000 due to physician documentation issues.

"We walked away from 20% of our revenue," the provider said. "(We are now) focused on arthritis, pediatrics and other conditions."

To offset a decrease in Medicare business, providers are seeking out other markets: 51% of respondents reported they have turned to cash and retail sales to pick up the slack, while 26% reported generating income through managed care contracts.

Provider Cliff Doss said his company is concentrating on retail sales, managed care contracts and one-time sale items with fewer paperwork requirements, like off-the-shelf orthotics.

"You can't have all of your eggs in one basket," said Doss, CEO of Fort Smith, Ark.-based AireCore Medical Services.

Despite all the hassles, providers haven't given up on Medicare completely: 75% of respondents to the November NewsPoll reported Medicare accounts for 30% or more of their payer mix; 25% reported it accounts for 70% or more of their business.