N.J. HMEs, Medicaid disagree

Monday, January 31, 2005

MILLVILLE, N.J. - When it comes to their Medicaid business, New Jersey providers “have a reason to be nervous,” said Ed Vaccaro, assistant director of Medicaid’s Office of Utilization Management.

“The market is changing,” Vaccaro said. “Decisions are being made that make things more cost effective.”

In late November, the Jersey Association of Medical Equipment Services sent a letter to the governor, complaining that, among other things, Global Medical Equipment, the company contracted to run the state’s DME recycling program, had inappropriately expanded the program to include beneficiaries in Medicaid HMOs. The state intended the program originally to include a relatively small pool of fee-for-service beneficiaries, which comprise a small percentage of the average provider’s business, said Terri Maggio, JAMES’ executive director. Medicaid HMOs, on the other hand, can be a huge part of a provider’s business.

“The guys worked hard to get accredited to get those HMO contracts, and now the business is drying up,“ Maggio said.

In all, the state owns about $12 million in DME that it recycles - equipment it cleans up and returns to the field once a beneficiary no longer needs it. Vacarro says the program saves New Jersey $200,000 to $300,000 a month. There are no regulations limiting the program to fee-for-service beneficiaries nor does any equipment go out dirty, Vaccaro said.

He added: “From our perspective, it makes a lot of sense to turn around equipment.”