The American Association for Homecare (AAHomecare) has released the results of its recent home medical equipment (HME) survey, which revealed “devastating impacts” on HME suppliers as a result of Medicare funding cuts.
In an Aug. 5 news announcement, AAHomecare noted “the profound impact of Medicare reimbursement cuts for home medical equipment suppliers that took effect on Jan. 1, 2024.
“The survey, conducted in July 2024, gathered insights from more than 100 HME suppliers across non-bid, non-rural areas who have a first-hand look at the impact of these cuts, revealing widespread financial strain, service reductions, and potential closures that threaten access to care for millions of Americans.”
Suppliers communicate the impact of funding cuts
The end of the 75/25 blended relief rate “led to a 20% reduction across the top 25 HCPCS codes” beginning Jan. 1. AAHomecare launched its survey in July to gauge how HME suppliers were faring in the face of sharply reduced funding.
The impact, said AAHomecare CEO/President Tom Ryan, has been immense.
“After six months of living with significant reimbursement cuts, many home medical equipment suppliers are nearing a breaking point,” Ryan said. “Lower reimbursements even as operational and product costs continue to rise are leading many to limit their offerings, reduce service areas, lay off staff, close locations, or even consider going out of business altogether. Those decisions are difficult for suppliers to make because they know the effects they will have on seniors and people with disabilities or chronic conditions who depend on HME every day.”
AAHomecare quoted statistics that demonstrated the impact of funding cuts, as reported by survey respondents:
— 46% have reduced the areas they serve.
— 17% have closed or plan to close locations.
— 53% have laid off staff or reduced staffing.
— More than 25% have changed the services and/or HME they provide.
— 65% have reduced the types/quantities of products provided to Medicare fee-for service beneficiaries.
— 12% have reduced patient services for Medicare fee-for-service beneficiaries.
— 12.1% have stopped taking assignment or are considering that action.
— 35% of owners are using their personal savings to keep their businesses operating.
— 79% reported funding cuts as well from Medicare Advantage plans, 51% reported cuts from commercial payers, and 34% reported Medicaid cuts.
— 12.1 % are considering closing the business or have decided to close the business.
Just 6.5% of respondents said the expiration of the 75/25 relief rate had not resulted in business changes.
“In many areas across the country, the HME infrastructure is nearing a breaking point, which could cause widespread access issues, not only for Medicare beneficiaries, but for all Americans who rely on HME to manage their medical needs in a home-based setting, regardless of payer,” the association said.
“The findings underscore the urgent need for policymakers to restore the relief provided by Congress for HME suppliers in non-bid/non-rural areas in 2020,” the association added. “AAHomecare urges Congress and the Centers for Medicare and Medicaid Services to act this year to prevent further damage to the home medical equipment sector and the millions of Americans who depend on high-quality, home-based care.”
