Providers make adjustments to weather Round 2

'Steps need to be taken to ensure viability'
Friday, March 15, 2013

YARMOUTH, Maine – The majority of respondents to a recent HME NewsPoll say they’ll be cutting staff and salaries in response to the recently announced payment amounts for Round 2.

Sixty-six percent of respondents who accepted contract offers say they either plan to lay off staff, or have done so already. Fifty-seven percent say they either plan to reduce salaries, or have done so already.

“Less people will have to do more,” said a provider from New York. “Insurance costs are higher, the cost of doing business is higher, salaries are higher in New York and yet some reimbursement amounts have been lowered by 60%.”

CMS announced on Jan. 30 payment amounts for Round 2 of competitive bidding that are, on average, 45% below the current fee schedule amounts.

The majority of respondents (40%) say more than six employees will be affected by lay offs. The majority of respondents (54%) say they will reduce salaries by more than 10%.

One respondent noted that the commission of sales representatives would be most impacted.

“We are also going to be cutting out office staff that we still need but cannot afford to keep with the lower reimbursement,” the respondent said.

Another respondent who said he would lay off four to six staff members but would not reduce salaries, summed it up this way: Tough choices have to be made.

“We’ll likely reduce some lines we had carried and may shutter a few locations that we can no longer afford to operate,” the respondent said. “It will reduce some convenience to patients, but steps need to be taken to ensure viability.”