Providers take on ‘downstreaming’

Sunday, February 29, 2004

YARMOUTH, Maine - HME providers in New Jersey and Colorado have had it with hospitals that refer most if not all patients needing home medical equipment to their in-house shops. To stop that practice, they intend to seek a legislative remedy.

“We need to make the public aware that (they) aren’t good neighbors,” said Don Paul, co-owner of Aerocare in Greeley, Co. “It’s like when a Wal-Mart moves into a neighborhood, all of the local business goes out of business. It is the same type of thing. They control the patients, the information flow, everything. We’re going to keep after them, maybe even put some ads in the paper.”

Paul is part of a consortium of HME and home healthcare dealers who meet once a month to discuss hospitals that funnel most referrals to their own homecare companies, a practice known as “downstreaming.”

In New Jersey, a group of 22 HME providers and their attorney blame wording in BBA ’97 for downstreaming. Paul and his group agree. That legislation addresses freedom of choice by requiring hospitals to give patients upon discharge a list of homecare companies that can service their needs. BBA ’97 doesn’t require hospitals to furnish a similar list of DME companies.

“People who wrote the law were not familiar with the vernacular of the industry,” said N.J. HME provider Herb Paserman. “It is certain they were talking about any kind of healthcare provider. However, if you go by the letter of the law, home health agency means a home nursing agency.”

That vagueness, when it comes to home medical equipment, allows hospitals to freely refer patients to their own HME company, said Paserman, one of 22 providers who belong to an ad hoc group, Coalition of Independent Medical Equipment Dealers.

“It’s almost like HMEs have to rely on the kindness of strangers for hospitals to refer them business,” said Corrine Parver, a healthcare attorney with Dickstein Shapiro Morin & Oshinsky in Washington.

Paul and Paserman are tired of waiting for that kindness. CIMED and its attorney, Dave Barmak, intend to seek legislative action later this year to clarify BBA 97 language. They want it to explicitly state that hospitals must provide patients with a list of local DME providers. Paul and his group have already contacted a local congressman about the same issue.

“The reality of the situation is that hospital employees steer patients toward vendors and healthcare providers that that hospital favors,” Barmak said. “That is not true patient choice, and that is not what the DME providers I represent are all about. They believe they can compete with anyone. Just give them an opportunity.