Payers use HIPAA to cut infusion reimbursement

Wednesday, April 30, 2003

WASHINGTON — Infusion providers in some areas are getting hammered with reimbursement cuts as payers move to transition to HIPAA’s national coding system by the Oct. 16 deadline.

For providers of most home medical equipment, cross-walking local codes to the HCPCS won’t be that painful. That’s because payers generally base their fee schedules on what Medicare pays.

But with home infusion, it’s a whole different ball game. Since there’s no standardization when it comes how payers reimburse for it, said Lorrie Kline Kaplan, executive director of the National Home Infusion Association.

In making the transition, breaking up the current per diem rate into various codes, a number of home infusion payers are taking the opportunity to redo their contracts and reduce reimbursement to increase their profitablity, providers say.

That happened recently to Joel Mills, CEO of Advanced Homecare in Greensboro, N.C.

“We go back to the insurance companies and say this isn’t good. We can’t accept it,” Mills said. “The say, ‘Take it or leave it.’”

When that happens, Advanced Homecare evaluates the contract to see if it’s worth keeping.

If other providers don’t do the same, if they go along with the cut, managed care companies have no reason to offer fair reimbursement, Mills said.

“As long as companies are willing to make bad decisions, we’ll never be able to get anywhere with managed care companies,” Mills said. “As soon as they stop being able to provide services, that’s when you start getting places with managed care.”

Kaplan agrees. Many infusion providers, especially smaller companies, don’t know what their costs are. Nor are they sophisticated when it comes to negotiating a contract and frequently neglect critical components such as what drug reimbursement will be based on, Kaplan said.

The key, she added, is to become educated on the ins and outs of contracting with payers, and to know exactly what payers can and can’t do when transitioning to HIPAA’s new coding system.

“It’s a game right now,” said Bob Simmons, owner of Boston Home Infusion in Dedham, Mass.

“They are saying we are not just going to break it up, we are going to pay you less money, too. “I’m in some negotiations with some payers who have tried to pull that, and I said, ‘No. You think you are going to pay me less because of these codes? I need a price increase because I haven’t had one in years.’” HME