An HME provider's last words


Below is a letter to the editor that I received from West Coast provider Dennis Kline. While there are more than a few providers exiting the HME industry these days, they usually go quietly, by closing their doors without fanfare or by selling to a larger provider. But not Kline.

After more than 20 years in the DME business I have decided that enough is enough and I’m exiting the business altogether. I've owned two companies during this time, most notably Source One Medical, once one of the largest suppliers of power wheelchairs and oxygen in the country. It is with mixed feelings that I am making this decision, but the fact is this business simply isn't satisfying or economically feasible anymore.

Instead of providing the highest level of product and service to insurance beneficiaries, mainly Medicare, and being able to make sure they are constantly being taken care of, we have been forced to provide the cheapest products available, many of them used, while having to considerably scale back on any additional service and care. The beneficiaries are paying the price, and concern for their care is taking a back seat in the eyes of Medicare, at the expense of overreaching and capricious audits and the suffocating oversight of our industry. The amount of fraud and abuse in the DME business is nowhere near as prevalent as it is with physicians, hospitals and clinics, but we are the easier targets.

Regardless of the product, we have been constantly under attack by various contractors, their mix of acronyms having become mind-boggling. Never a day went by that we weren't notified of an audit, additional paperwork necessary, a denial for unjust reasons, an audit decision not in our favor, or an Administrative Law Judge hearing 6 to 9 months out. At least 60% of our claims were being audited in some form. From the time we were first notified of an audit to the time we finally got to present our case in front of an ALJ, almost two years went by.

The cash flow problems this causes, when extrapolated, are enormous. The various reasons for denial prior to the ALJ level have been capricious and grossly unfair, with little or no bearing on the beneficiary’s actual need. We were once denied because the reviewer didn't think the patient could sign so neatly given their condition, in effect accusing us of forging the paperwork! The creativity the contractors have used in finding new ways to deny a claim were truly astounding. They should be ashamed of their harmful denial of care and the taking away of rightful entitlement. But I'm sure they can care less if it results in a misguided savings to the Medicare program.

I have constantly asked if anyone in the audit process has ever talked directly to the patient or physician, and the answer was always, "No, we don't have the time." The overall cost to taxpayers for this process to continue for almost two years, when one call could answer everything, is incomprehensible. Not to mention the cost to the beneficiary for being denied the benefit only because his physician didn't word his chart notes specifically the way the medical reviewers want to see them. But this could result in more rightful claims paid, and they certainly don't want that.

Add to this the sham of competitive bidding and the damage this is doing, and will continue to do, to the industry, to entrepreneurial business enterprises, and, most importantly, to beneficiary care. How our senators and congressmen can allow this program to move forward is an absolute travesty. Jobs are being lost, patient care is being severely compromised, and even those companies getting contracts are barely making it. Nevertheless, when it comes to competitive bidding the people at CMS have both blinders and earplugs in place, moving forward with their path of destruction. And Capital Hill is barely taking notice. Hopefully, the industry can get the market-pricing program passed, a small victory in a sea of defeats.

How did we ever get to this place? From my perspective everything started to go downhill with Harris County back in the 90s. It’s the fault of CMS for not properly applying logical and simple oversights to the billings by newer providers. As a result, honest providers that are doing their best to provide and comply—the majority—have been forced to pay the price because CMS was not properly policing the industry. Even in the years since Harris County, CMS has done little or nothing to sort out the honest and lasting providers who have constantly proven their compliance from the newer providers intent on committing fraud.
In the end, Source One was left with compounding debt as a result of the interrupted cash flow, along with an AR level that we had a 50/50 chance of ever seeing in the one to two years we would have to wait. As I said before, it simply was no longer a satisfying or economically feasible business. There's much more I can vent about that has damaged our industry, but just these issues are exhausting and frustrating to discuss.

I leave this business with some fond memories, but I will never return in an ownership capacity. I doubt I'll ever return at all; the scars will certainly take time to heal. I wish everyone in this great business the very best, and certainly do not look forward to ever needing any benefits under the Medicare program.

—Dennis Kline, president and CEO, Source One Medical, Irvine, Calif.