Observation Deck

Where Do We Go from Here?

HME continues to secure policy wins, but what will the industry need to do to keep its advocacy momentum going in 2020?

The start of a new decade finds the HME community facing this question: how can we protect and enhance our industry’s unique role in the healthcare continuum and position ourselves to take advantage of major opportunities that lie ahead?

Count me as one of the optimists who believe that HME is poised for a future of growth thanks to our nation’s demographics and HME’s potential to deliver cost-effective care in a patient-preferred setting.

The demographic argument is clear and unmistakable. The population of older Americans, who make up the lion’s share of HME users in many product categories, is set for a steep growth trajectory in the decades ahead — and especially in the next decade. From 2020 to 2030, the number of individuals aged 65 and above will grow from 56 million to 73 million, a 25 percent increase. The number of individuals 85 and up will grow even more rapidly with a 35 percent spike. By comparison, the population aged 64 and below is set to grow by just 2 percent over the decade.

This is a senior population that will want and expect healthcare resources that help them stay at home, and HME can play a major role in their care. Put simply, mobility solutions, respiratory therapy, medical supplies and other HME products will not go wanting for individuals who need them.

Budget Pressures

At the same time, the cost of healthcare, especially for senior citizens and people with disabilities, is a cause for concern for individuals, families, and especially governments.

Net Medicare spending — meaning the share of federal outlays not offset by beneficiary premiums — is set to more than double over the next decade, as well, eclipsing the $1.2 trillion mark. On a per-capita basis, Medicare spending will increase by about 5 percent over that period. In addition, the ratio of workers contributing Medicare payroll takes per retiree is expected to stand at 2.4 workers per retiree, a ratio steadily declining from 3.7 workers per retiree in 1970. While Medicaid enrollment is growing at a slower pace, overall Medicaid spending is also expected to grow at by more than 5 percent in 2020.

The Federal government and the states will continue to look to cut costs wherever they can to help rein in Medicare and Medicaid outlays. The good news is that the industry is making an effective case with legislators and regulators, both in D.C. and in state capitols, for more sustainable reimbursement policy.

Pushing Back Against Reimbursement Cuts

After CMS consistently pared down HME reimbursement through a series of cuts dating back to the late 1990s, and also through the advent of the bidding program in 2008, the industry finally saw a small measure of relief for rural and non-bid-area suppliers in 2018. The Agency has also incorporated several reforms championed by AAHomecare and other industry stakeholders into regulations and requirements for CB Round 2021.

At the state level, AAHomecare’s investment in developing and staffing a payer relations program has paid major dividends for our industry. In addition to various successes in maintaining open access for HME companies, we’ve worked with state and regional association partners to stop or limit proposed Medicaid rate cuts in dozens of states.

We’ve made important strides towards stabilizing HME reimbursement rates, payers need solutions that will help keep overall healthcare spending in check, and a population cohort that depends on our products and services is growing. It points to a future with great opportunity for the HME — but we have to position ourselves to take advantage of it.

Selling the Value Proposition for HME

The value proposition for HME is easy for individuals in our industry to understand. We have a front-row view of how our products deliver medical benefits and positive outcomes for patients in a home-based setting. When compared to the costs of hospitalization, extended rehab facility stays, and other clinical interventions HME helps prevent or limit, the value we deliver is unarguable.

But what’s apparent to us isn’t as widely known or accepted by regulators and legislators as it should be. We’ve made progress in communicating the benefits of HME on Capitol Hill through persistent grassroots advocacy and face-to-face lobbying in recent years — but we need to accelerate the understanding of our value proposition if we are going to cut through the hundreds of healthcare issues competing for Congress’ attention and action. Incremental gains just won’t cut it.

Better Data Can Make the Difference

Our payer relations team’s success in helping hold the line on proposed Medicaid reimbursement cuts has been underpinned by a focus on educating state regulators and legislators on the value of HME. AAHomecare’s newly established Payer Relations Council plans to build on this success by developing a framework to obtain more data from state Medicaid authorities and MCOs to better understand the broad fiscal and patient-outcome impacts of reimbursement cuts.

This effort will include streamlining our FOIA request process to get claims data from states and MCOs. This data will help us better demonstrate the value of HME to payers, which should prove useful in negotiations on rate-setting and efforts to promote quality standards. We plan to apply lessons learned from these state-level efforts to supplement and improve our capabilities in obtaining data from CMS, as well.

AAHomecare and other HME advocacy organizations need more data that regulators and policymakers can’t discount as anecdotal or subjective to bolster our case for sustainable reimbursement rates and access to our industry’s products and services. Improving our ability to access and utilize claims data from state, MCO, and Federal sources regulators needs to be a top priority for our industry; I’m excited that AAHomecare is making a stronger commitment to making this happen.

Bringing More Resources to the Fight

We’re seeing sustained grassroots advocacy efforts on Capitol Hill generate stronger support for HME policy priorities. Our latest win was the permanent exclusion of manual CRT wheelchairs from the bidding program. That said, we need even more resources to help us fight for more sustainable reimbursement rates from Medicare and other payers. AAHomecare has made growing our membership a priority for 2020. With more companies actively involved in HME advocacy and with additional financial resources, we can accomplish even more — and make sure that we can all be a part of a better future for HME.

This article originally appeared in the January/February 2020 issue of HME Business.

About the Author

Tom Ryan is the president and CEO of the American Association for Homecare (Washington, D.C.), the industry's national association.

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