Payment delays shake rehab

Saturday, March 31, 2007

WASHINGTON - Since Medicare implemented new codes, coverage criteria and pricing for PMDs last fall, Medicare has taken too long to pay providers--if at all--causing severe cash-flow issues for some.
"The reimbursement amount isn't the issue; it's the length of time it's taking to get reimbursed," said Rob Summitt, president of The Summitt Group, a rehab provider in Chattanooga, Tenn. "We have deals with manufacturers for 90 days, but we're not getting paid for 120 to 160 days."
Delays in payment have been exacerbated by Medicare's transition from DMERCs to MACs, industry sources said (For an update, see page 12).
Medicare, industry sources suspect, is taking longer to pay providers because they're still getting up to speed on the revamped PMD benefit. Additionally, it's probably conducting more audits, some of them by hand, they said.
Providers believe the delays will work themselves out eventually, but it's going to take six months to a year, they said.
Meanwhile, more providers are considering leasing equipment from manufacturers.
"I haven't done a lease in years, but I'm looking at it now," said Jody Wright, president of Rocky Mountain Medical Equipment in Englewood, Colo., and president of the Colorado Association for Medical Equipment Services. "We need to nest egg some dollars."
While improving payment delays would be the biggest answer to their problems, providers have also begun to reduce costs by modifying the number of PMDs they carry, chipping away at services and making other changes to their businesses.
"We've trimmed down our hours--we used to be open on Saturdays; now we're not," said Dan Lipka, an ATS for Miller's Rental & Sales in Akron, Ohio. "We don't provide 24-hour service anymore, either, except for oxygen."
Additionally, providers like Tim Barrett, operations manager for Rehab Designs in Louisville, Ky., have been more discriminating in the PMD prescriptions they fill.
"You have to look at your chances of getting paid before signing on for something," he said. "You can't say, 'If you have a prescription, come on over.' You have to be more proactive."
At the end of the day, there's a feeling of helplessness that pervades the industry right now, sources said, with reports of some providers close to shutting their doors.
"We're paying our bills on time, I'm proud to say, but it feels like the whole system is collapsing under its own weight," said Wendell Matas, president of Wheelchair Northwest in Bellevue, Wash., and president of the Pacific Association for Medical Equipment Services.