Stakeholders detail ‘alarming’ situation in rural areas

Seek bill with non-HME pay-for to pass before Sept. 30
Friday, September 16, 2016

WASHINGTON – After a tough week in which CMS trumpeted its competitive bidding program for HME as having no impact on access, all the while creating significant savings, AAHomecare hit back.

The association, with help from its recently engaged public relations firm DCI Group, held a teleconference for the media on Sept. 14 detailing how the roll out of bid pricing to rural areas on Jan. 1 and July 1 is having catastrophic effects on HME businesses and Medicare beneficiaries.

“Six months is not long enough to monitor this disruption,” said Tom Ryan, president and CEO of AAHomecare, which has been working doggedly with its champions in Congress to retroactively delay the July 1 cuts. “This limited phase-in is irresponsible.”

Together, the two rounds of reimbursement cuts represent a 50% to 60% reduction from the original fee schedule in rural areas.

Ryan had with him on the call four providers who gave reports from the front lines. Among them: Joey Tart of Family Medical Supply in North Carolina, who says at least 10 companies providing HME in the state have closed their doors in the past six to 12 months.

“When you take this pricing and put it in small areas, you can’t make up for the numbers in customers, so you end up closing that office,” he said. “Then someone has to drive many miles to service that patient, which they won’t, if they have to travel and spend that time.”

Provider Thad Connally of First Choice Home Medical in Kentucky says his company has reduced in size from 15 employees three years ago to six employees, including himself, today.

“Yet, the demand and need (for our services) are not going away—actually, they’re increasing,” he said. “We’re trying to figure out how to take care of people with little or no reimbursement. The financial side has been mind boggling.”

Ryan pointed out that the catastrophic effects of the bid program don’t affect small providers exclusively. William Guidetti of Apria was also on the call and said the national provider has experienced “more branch remediation than it thought possible.”

“Every day, we’re getting more and more alarming calls from patients,” he said. “We can’t be as responsive as we have been in the past.”

Ryan says industry stakeholders and their champions in Congress are under pressure to come up with a bill that would retroactively delay the second round of reimbursement cuts before Sept. 30, when lawmakers leave the Hill for the November election. How long of a delay and how the industry would pay for it are still unknowns. He did say the pay-for would likely be non-HME related, as the industry has “nothing left to give.”

“We have the utmost urgency to get this taken care of,” he said.


I justed want people to be aware that all the HMO (managed care) contracts for our commercial and senior plans are about 60-65% of these cut rates. How do we stay in business and service pateients at such rates?Patients are not going to be discharged timely due tho these cut backs and it is going to cost the government more money.  If you think the Medicare rates are bad then take a look at the HMO rates. You will be shocked. The HMO contracts should be stated in some of the articles.

Our company did not bid for competitive bid because of the low rates.  Now most of our contracts are a percentage of the National Pricing and we are struggling to get the insurance companies to amend the rates and without much success.  Why isn't this issue coming up in any of the articles that I'm reading.  Is congress aware that most of the insurance companies and medical groups are a percentage of the national pricing!!!!!

We are closing are doors because of the Medicare cuts. After 170 years of doing business.

We are located in Central , IL . 

There is now way we can provide qaulity care or quality equipment at these paymentes rates!

Throw in the State of IL public aid system not being able to pay thier bills on time it is a no win situation!

Our family has been providing service to our community since 1846. It was originally a drug store then my Great grandfather owned three drug stores in the depression. 

It's a sad day when our government runs qaulity providers out of business.

Service and quality of equipment will be a thing of the past! End of an era in our community!


Steve Gulick


Gulcks Illiana Medical Equipment and Supply

Danville , IL 







Hi Steve, we were dismayed to hear of Gulick's closing. It's terrible when government initiatives force longtime companies out of business.