Providers prep for more fallout in Round 1 areas

Friday, October 7, 2016

YARMOUTH, Maine – HME providers in Round 1 areas are bracing themselves for an additional Medicare reimbursement cut of, on average, 5.2% on Jan. 1.

For a lot of providers, the hardest part is explaining to patients why they can no longer service them, says Tammy Crim, general manager at Medical Comfort Systems in Charlotte, N.C., which won but declined a contract for general DME. 

“They don’t understand what’s going on,” she said. “When someone has been getting CPAP supplies from us forever and we have to tell them in January that we can’t supply their supplies anymore, they don’t understand.”

Products with the steepest cuts in reimbursement include TENS devices with a 45.1% decrease and CPAP devices with an 18.5% decrease.

As providers in Round 1 areas contend with tighter margins, some are asking patients to pick up wheelchairs from their locations to cut down delivery costs.

“We’re seeing that already and that’s before these new rates even hit,” said Andrew Trammell, vice president and CFO of Matthews, N.C.-based Carolina’s Home Medical Equipment, which accepted six contracts for mobility, general DME and negative pressure wound pressure.

When you add audits to the mix, it’s even more of a challenge to eek out a margin, says Chris Rice, CEO of Diamond Respiratory in Riverside, Calif., which accepted contracts in all categories for Round 1 2017 and previously accepted numerous contracts in the Round 1 re-compete.

“We had to really hone in and drill down on the documentation requirements to make sure we get paid and keep the money,” he said.

That’s not to say that there couldn’t be a light at the end of the tunnel. Craig Rae, president of Penrod Medical Equipment in Salisbury, N.C., which accepted Round 1 2017 contracts for mobility and general DME, notes that for high-volume items, like some manual wheelchairs, the rates in his area are actually 20% to 30% higher than they were for the Round 2 re-compete.

“I think a lot a people are missing is that,” he said. “I look at as a sign that there’s finally enough responsible people out there who aren’t offering lowball bids.”