Editor's Note

Upgrading to HME 2.0

CMS's policies aren't compatible with HME. Can providers find a better way to operate?

Have you ever installed a new operating system on an older computer or electronic gadget? It’s as though you’re steeping into the electronic void — a great leap of digital faith is required. You have a working system that does what you need, but the new operating system offers some bells and whistles you find hard to ignore.

Those new features and functionality might be tempting, but you never know for sure if the new software is going to play nice with your hardware. You might be singing the new system’s praises, or you might have so much trouble you’ll be wishing you had your old system back.

With competitive bidding, CMS forced a new operating system on HME providers, their patients and their referral partners without ever determining if the system would work. What’s more, like a tech support Greek chorus, a variety of experts — hundreds of them, including Nobel laureates — told CMS it wouldn’t work.

And now we’re beginning to see the bugs in CMS’s new DMEPOS operating system come to life. During the Round Two rollout, we saw providers that clearly had no wherewithal to serve contracts in far-flung CBAs win contracts; we saw CMS award contracts to companies with no state certifications or licensure; and we saw CMS repeat the same mistakes it made in Round One that it promised to correct — and worse.

Welcome to HME 2.0

So what can providers do? They actually have more options than they realize, but not the one option they might want most: to go back to the way things were. It’s sort of like an iPhone. You can upgrade an older iPhone to iOS7, but once you do, that’s it — there’s no going back, even if your phone starts running slower, runs out of battery quicker, or doesn’t have as much storage space as before.

Such is the case for HME. Let’s say that providers have their day on Capitol Hill and are able to secure the repeal of competitive bidding and implementation of the market pricing program (MPP) either through passage of H.R. 1717, or by attaching legislative language to a major piece of legislation, such as the doc fix. That’d be great news, but it would still force providers into a whole new way of doing business.

Or, at the worst, competitive bidding stays in place, and providers are forced to live under it. That’s a scenario no one wants to consider, but at present it is very much the reality for the industry. Now providers have some borrowed time thanks to grandfathering, but that will only take them so far.

Unfortunately, we have been upgraded to HME 2.0 and there’s no downgrade possible. We’re stuck. The question is, how stuck?

If a provider, especially one that has been negatively impacted by competitive bidding, wants to continue doing business in the old way, that provider is definitely going to be intractably mired in business models that don’t fit the new reality.

But if a provider is willing to try find new ways to succeed in an HME 2.0 landscape, it just might find the kinds of “work arounds” that eventually lead to it carving out a new business niche that is stable, sustainable and profitable.

Above all, unlike an old piece of technology that has had a new operating system installed on it, HME businesses have the ability to adapt to the new software. An old smart phone can’t change its electronics, or its screen, or its battery, but HME providers can mutate their circuitry and evolve all-new mother boards. They can identify previously untapped revenue opportunities that let them leverage their established expertise and business and patient relationships in new ways. They can use their market position to branch out into entirely new realms of service. In effect, they can, through the direction of sharp ownership and management, write their own operating systems.

The key lies in a willingness to take that leap of faith to redefine and reinvent the business. That is the paramount challenge providers face in 2014.

This article originally appeared in the January 2014 issue of HME Business.

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on LinkedIn at linkedin.com/in/dkopf/ and on Twitter at @postacutenews.

HME Business Podcast