In the trenches: An association battles Medicaid cuts
Will the last company to leave the state please turn out the lights? The dark clouds hovering over the DME industry show no signs of letting up any time soon, leaving providers wondering if they will be able to ride out the storm.
In New England, our struggle with Medicaid reimbursement cuts began two years ago in Connecticut. In 2003, the governor's budget proposed a change in reimbursement for non-coded items from list-less 15% to cost-plus 25%. With the help of a well-connected local lobbyist, members of the New England Medical Equipment Dealers (NEMED) association lobbied their state representatives, testified at public hearings and sent out more than 8,000 letters to Medicaid beneficiaries to inform them of the issue and ask them to help get our message out. In the end, the language was removed. Our success was short-lived as the state began the transition from "local" to HIPAA compliant codes. Not only did they adopt the codes, they adopted Medicare's allowables with an additional percentage off. We're seeing this in other New England states as well. NEMED is continuing to work with Connecticut Medicaid on these issues.
The most significant cuts came out in December 2003 from Massachusetts Medicaid. The rates hadn't been reviewed in seven years. We were surprised by the scope and depth of cuts being proposed. Implementation would have lead to major access issues. NEMED immediately submitted comments voicing our concerns as we simultaneously began to prepare for the public hearing in January 2004. Our members did an outstanding job of identifying where the major problems existed and rallying their patients to attend the hearing. When the state got wind that beneficiaries were planning to testify, before a very interested media (local newspapers and TV planned to attend), the state met with NEMED prior to the hearing and ultimately rescinded the proposed regulations. Over the next several months, NEMED worked with the state to correct the major problems prior to the release of the new regulations in July 2004. There are still problems with reimbursement and coding, most notably custom rehab, which we are continuing to work on with the state.
We are in a "wait and see" pattern with the other New England states. The recent news that President Bush is proposing Federal Medicaid cuts is cause for great concern. Between Federal (and most likely) state Medicaid cuts, Medicare cuts, mandatory accreditation and national competitive bidding, it is no wonder that many providers have made the decision to sell. NEMED has lost eight members in the last two years due to acquisitions. We anticipate this trend to continue. However, since the majority of our membership is small "Mom & Pop" companies, NEMED will continue to advocate for the industry on both the local and federal levels.
Since membership dues are the life blood for the association, we have placed a high level of importance on member recruitment. Our assistant executive director, Robbin Boardman, devotes much of her time working with our membership committee. The results have been impressive: 28 new provider companies last year, 12 since our fiscal year began on October 1. Growing our numbers is important. How many companies do you represent? How much of the Medicare/Medicaid market? How many beneficiaries do you represent? Legislators want this information.
What should providers do?
1.First (and I am not trying to be self-promoting here), providers need to belong to their state and national associations (AAHomecare, NCART). There is strength in numbers. Your state association is working for you on the state level and national associations are your voice on Capitol Hill. Membership in these organizations will be critical to our success in the years to come.
2. Be proactive. Become acquainted with the staff in your state and general legislators' local office. Schedule a site visit, either with the congressman or the health legislative aide. The days of staying within the confines of your company are over. All providers, regardless of size, need to carve out some time to lobby. One great way is to attend the AAHomecare Legislative Conference each year. If you are unable to attend, get AAH's position papers and arrange a meeting at your representative's local office.
Our board is committed to continue bringing the best consultants in the country to New England to help our members remain viable. NEMED looks forward to working with our national associations and other groups to demonstrate the value of homecare. It's important for the industry to speak with a united voice -- now more than ever. As Benjamin Franklin once said, "We must all hang together, or assuredly we shall all hang separately."
Karyn Estrella is executive director of the New England Medical Equipment Dealers association.