Vent cuts hurt Florida providers business

Wednesday, April 30, 2003

ORANGE PARK, Fla. — It’s a sad day when a company has to turn away business due to no fault of its own. But dwindling Medicaid reimbursement coupled with increased insurance costs has forced Chris Horne, president of Advanced Home Respiratory, to do just that.

“This is a small part of home care,” Horne said regarding his ventilator business. “You have to be able to make money to keep going and we can’t keep taking these incredible risks. You could lose your agency.”

While Horne said Advanced Home Respiratory gets reimbursed for the ventilators it supplies, additional costs for care of the patients and monitoring of the equipment is not covered. Additionally, the liability with such a hands-on profession that attempts to keep patients out of the hospital, he said, should be covered, but insurance costs are too high.

“A patient on a ventilator is going to die, we all know that, but the state won’t pay for the care,” Horne said.

David Fletcher, owner of Fletcher Medical Supply in Jacksonville, agrees that it is getting more difficult in Florida to “keep a healthy bottom line.” But, he said, the supplier has been able to offer a reduced price on ventilators due to the baby-boomer generation bringing an increase in volume to the industry.

“We’ve been feeling the pinch for years,” Fletcher said about his 60-employee business. “We took a 20% cut years ago and a 5% cut last year.”

Fletcher said he expects with such large cuts coming, Medicare will eventually succumb to competitive bidding. And what will end up happening, he said, is that the industry will see a reduction of around 5% to 15% because clients will be able to get ventilators at cost, eliminating some suppliers from the market.

One of those suppliers could be Advanced Home Respiratory, Horne said, as the supplier has felt the effects of reimbursements dropping for the last six months.

He said Medicaid is not paying the 20% Medicare co-pay on a ventilator that suppliers depend on, forcing many patients to be institutionalized at a hospital.

“I’ve got people begging me,” Horne said. “It’s a very difficult thing for me to deal with. We’re not able to provide the care for the money we’re getting and (patients) are getting stuck in hospitals.”

The reimbursement for a standard ventilator is about $700, according to Fletcher. However, Horne said, to start service for a patient, which includes equipment and care, costs between $11,000 and $14,000.

“We’re responsible for everything,” Horne said about the amount of care involved with each patient. “What we do is grossly undervalued. There needs to be a balance between economics and healthcare.” HME