AAH Update: New Organization Announces Goals

The American Association for Homecare (AAH) in January announced its plan to ease the confusion on Capitol Hill by providing one strong and unified voice to relay the needs of home care patients and providers.

As Congress continues to examine health care issues and the elderly population increases, this all-inclusive home care organization will reinforce home care as the cost-effective, patient-preferred method of care. AAH is the first all-inclusive home care organization and will derive strength from a unified voice.

One from Three

AAH was formed from the merger of three national home care associations: the Health Industry Distributors Association's Home Care Division (HIDA Home Care), the Home Health Services and Staffing Association (HHSSA) and the National Association for Medical Equipment Services (NAMES).

The Balanced Budget Act of 1997 severely damaged home care providers and patients' access to home care services. The damage resulting from this act emphasized the need for a more unified and effective voice for home care providers and patients.

AAH is that voice. Combining the expertise and strength of each organization enables the AAH to be an effective advocate for sound public policy for home care.

The AAH is the only national association that represents the full home care spectrum including IV therapy, home medical equipment (HME) providers, manufacturers and suppliers, and home health providers.

Membership in the AAH includes all types of home care providers -non-profit, proprietary, facility-based, freestanding and governmentally owned - regardless of the nature of services they provide. Membership in the AAH includes approximately 1,000 home care providers with more than 3,000 locations.


The vision of the AAH is to make it possible for consumers to receive the best medical care at home that technology will allow. The association supports maximizing consumer access to home care and maximizing consumer choice in the selection of home care providers.

Recent developments in public policy have unintentionally hampered these goals. A recent study by the Center for Health Services Research and Policy at the George Washington University, Washington, shows the 1997 reductions in Medicare's home health funding have curtailed access to home care for patients with diabetes, multiple sclerosis, pulmonary disease and severe wounds (often as a consequence of diabetes).

Further reductions in funding the Medicare home health benefit scheduled for October 2001 will exacerbate the situation.

The Health Care Financing Administration's (HCFA) competitive bidding and inherent reasonableness(IR) initiatives will also severely narrow consumer choice among HME providers and related services.

What HME provides offer is not simply equipment but also the services vital to making that equipment efficacious - set up, user education and training, and maintenance and repair. Those crucial services will be lost when HME becomes a commodity drop-shipped to consumers' homes.

In addition to promoting the benefits of home care to patients' health, the AAH also will emphasize the cost-effectiveness of care provided in the home compared to other venues, particularly nursing homes and hospitals.

Public policy that makes it difficult for consumers to receive medical care at home is public policy that promotes waste and inefficiency in the health care system.

Organizational Structure

In addition to the members that are providers and manufacturers of home health services and equipment, there are associate members and state association members.

Associate members include consultants, service companies, manufacturers, vendors and others supporting the home care continuum while state association members include home care and HME state associations.

AAH is led by a board of directors and an executive committee conducts the affairs of the organization in the absence of the full board of directors. The staff of the new organization is led by:

  • Galen D. Powers, interim president
  • Cara Bachenheimer, vice president of member services
  • Mara Benner, vice president of government relations (home health focus)
  • Asela M. Cuervo, vice president of government relations (home medical equipment focus)

There are six standing committees: finance, nominating, legislative, regulatory, membership, and standards and ethics. There will be five advisory councils representing the main segments of home care: home health, home medical equipment/respiratory therapy, infusion/pharmaceutical, rehabilitation and state associations. These advisory councils will provide a means for their constituents to meet, confer and channel their priorities to the association's standing committees.

A key source of power for any association is the volunteer network that contributes time and expertise to the various groups that bring meaning to the association's message and help guide its activities. The association is actively seeking volunteers to serve on each of the committees and on the advisory councils.

Government Relations Priorities for 2000

The AAH will concentrate on four key legislative issues in 2000:

1. Elimination of Additional Reductions to the Home Health Benefit


Congress should maintain Medicare beneficiaries' access to home health services by eliminating the additional 15 percent payment cut scheduled to be implemented on Oct. 1, 2001.

Home health reimbursements have already been reduced by much larger amounts than originally forecasted, and as a consequence, the most frail elderly are experiencing problems with access to home health care. The additional 15 percent reduction will only aggravate these problems.


  • The Balanced Budget Act of 1997 (BBA) was originally scored to reduce spending for the home health benefit by approximately $16.1 billion during 5 years. However, the impact of the BBA was more drastic. In March 1999, the Congressional Budget Office revised its estimate to a reduction of more than $48 billion during 5 years.
  • A two-part study by George Washington University's Center for Health Services Research and Policy has provided significant evidence of access problems to home health services for certain Medicare beneficiaries.
  • Recent legislative changes hold promises of being helpful in alleviating further problems of access to the Medicare home health benefit; however, that promise will not be fulfilled if the additional 15 percent reduction scheduled for Oct. 1, 2001, goes into effect.

2. Examination of Competitive Bidding Demonstration Project


Congress should carefully examine the results of the current HME competitive bidding demonstration project in Polk County, Fla., before expanding competitive bidding to new areas. The demonstration has the potential to eliminate market competition, harm beneficiary access to quality medical services and cause irreparable damage to small businesses. Such a radical change in the Medicare benefit should not be expanded without careful examination.


  • Competitive Bidding is a misnomer: Although the term "competitive bidding" may sound attractive, the demonstration actually eliminates the free market competition that encourages the provision of high-quality medical services to Medicare beneficiaries. The demonstration reduces the number of HME providers who can serve beneficiaries with specific needs. In fact, the demonstration eclipses the key component of free market competition - consumer choice. therefore, Medicare's winning bidders are not subject to the market forces of consumerism.
  • Access and Choice: In order to implement the competitive bidding demonstration, HCFA waived the section of the Social Security Act that guarantees patients' ability to choose their own health care provider. The beneficiaries in this demonstration have lost one of the most important means of controlling health care quality - the ability to use the provider of their choice. Importantly, these beneficiaries have not been given the option to opt out of the project. If a beneficiary is dissatisfied with the services provided by the winning bidders, he or she will have very limited alternatives.
  • Loss of Quality and Service: Competitive bidding is inappropriate for HME because the health services that accompany medical equipment are as important to beneficiaries as the products themselves. Home oxygen equipment cannot be drop-shipped to patients.Therapeutic support services are crucial to positive outcomes. History shows that once an artificially low bid is awarded and the contract holder faces budget pressures, the first thing the provider eliminates is service such as preventative maintenance, patient education, 24-hour on-call service, respiratory therapists and the furnishing of supplies. Once these services are removed the beneficiary is much more likely to experience health problems, which in turn may cause additional costs to Medicare. Unfortunately, HCFA failed to incorporate any real quality control measures into the demonstration design.
  • Impact on Small Businesses: The average HME provider is a small, "mom and pop" operation with fewer than 20 employees and less than $3 million in annual revenue.Many small HME businesses in Polk County have lost the ability to serve Medicare beneficiaries who require home oxygen equipment, hospital beds, surgical dressings, enteral nutrients or incontinence supplies as a result of the demonstration project. For the average HME provider, this demonstration project has amounted to a loss of approximately 27 percent of annual revenue. Few businesses will be able to withstand this loss, and many HME providers will be forced to close.

3. Implementation of Inherent Reasonableness in a Rational Manner


Congress should remain vigilant in its oversight of HCFA's implementation of the expedited IR authority granted in the BBA. Congress should assure that HCFA uses statistically valid data to support IR initiatives and prohibit HCFA from circumventing the due process safeguards that govern the development of regulations.


  • HCFA and its Durable Medical Equipment Regional Carriers (DMERC) have used statistically invalid and non-representative data to justify reimbursement reductions above and beyond the limit imposed by the BBA.
  • The severe reimbursement reductions proposed by HCFA and the DMERCs could seriously curtail beneficiary access to medically necessary equipment and services.
  • HCFA implemented this authority via an interim final rule rather than a proposed rule with the traditional notice and comment period.This process circumvents the requirements contained in the Administrative Procedures Act and the Social Security Act.
  • Congress has required HCFA to promulgate a final rule to implement the IR authority. In addition, the General Accounting Office is studying the process and data used by the DMERCs in their IR determinations.

4. Implementation of the Home Health Prospective Payment System


HCFA was mandated under the BBA to implement a prospective payment system (PPS) for Medicare home health services effective Oct. 1, 2000. The new system will dramatically change the reimbursement and incentives for home health providers. As a result, Congress should urge HCFA to release the PPS rates as soon as possible and provide close oversight of the new system's implementation.


  • All home health agencies and fiscal intermediaries will begin a completely new and untested reimbursement system effective Oct. 1, 2000. Home health agencies need as much information as possible -- including actual rates-- to understand the implications of the new system.
  • The proposed rule was released in October 1999 with the basic framework for the new PPS. The final rule will be released in July 2000 permitting less than 3 months for home health agencies and fiscal intermediaries to prepare and operationalize the system.
  • The Medicare home health benefit has undergone significant changes with negative consequences during the past 2 years. During that time, HCFA has released regulations and rescinded the regulation. Due to the magnitude of the changes expected in October, Congress should assure proper access to home health services by beneficiaries and proper information to providers and fiscal intermediaries.

As a unified voice for the various aspects and segments of home care, the AAH will provide an effective channel to monitor and support the best interests of home care providers and patients. The unified voice should give HME providers a strong ally in Washington on the issues mentioned here and in future initiatives.

This article originally appeared in the March 2000 issue of HME Business.


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