VIDEO: Providers Describe Impact of Cuts

As the July 1 cuts take hold, HME providers convey the impact that cuts are having on their patients and their ability to stay in business.

As the July 1 cuts applied to DMEPOS claims in rural areas covered by the national expansion of competitive bidding take hold, providers in those areas are being forced to make tough business and care choices as a result. 

On such provider, Paul Gammie, owner and general manager of Hawaiia’s Gammie Homecare, which serves Maui and Kuai, recently posted a video explaining the circumstances his business and patients are facing.

“The communities that I live in, and the communities that we represent as a company, but also all across the United States, many rural areas will be greatly hurt by what Medicare has done, related to people getting the products and services they need ; the tools to stay at home,” Gammie said in his video. “We call it home medical equipment, other people call it their tools of life.”

Gammie then explained how the July 1 cuts represented an average 50 percent cut on his reimbursement, and how that would impact his company’s care.

“This company has run on the last five years on a five percent profit margin,” he said. “There  is no way I can have a 50 percent reduction in the pricing for the products we supply and have things stay the same. This is true for the all the rural areas in the United States.”

Bearing that in mind, Gamie said that as of April 1, 2016 his business will no longer do business with the Medicare program. Given that his is the only business that provides power mobility devices and is the primary provider of other primary medical devices.

Another provider coming to terms with the cuts is J&B Medical, which is not only dealing the cuts, but also audits. J&B has had to deal with ZPIC prepay audits on its oxygen and sleep therapy business, followed by ZPIC post-pay audits which lasted longer than two years.

J&B vice president and compliance officer Kim Wonsick said the July 1 cuts “will once again test our resolve to remain in this business we began in 2002 in an effort to provide our small town in Northwest Florida access to quality and affordable home medical equipment.”

Once again, one the main responses have been to not deal with Medicare and to make tough internal HR decisions.

“Last month we stopped taking new patients from Walton County, which is a rural county that is next to our county,” Wonsick said. “Today we had to let go of the very first employee that we hired in March of 2002 …Next month we will be reducing our contribution to employees health insurance; previously it was 100 percent. We will also be cutting pay and/or hours if the January prices are not reinstated in a timely fashion. Finally, we will be eliminating our retirement plan at the end of this year.”

As the industry prepares to take its case for rural bidding relief to Capitol Hill once again in September, stories such as J&B Medical’s and Gammie Homecare help industry advocates convey national expansion’s negative consequences to lawmakers. Bearing that in mind, the American Association for Homecare is calling on providers to share their stories.

“I ask you to take some time to verbalize and share your stories with us, so that we may make the most compelling case possible with our Congressional champions as we mobilize once more in the coming weeks to package and pass a legislative solution in September,” Michael Nicol, senior director of membership services for AAHomecare, recently stated. “If your company is experiencing difficult business decisions, not accepting new patients, or making other changes based on the January 1 and July 1 cuts, please let us know.”

Providers should send their stories to Nichol at michaeln@aahomecare.org, or Tilly Gambill at tillyg@aahomecare.org.

About the Author

David Kopf is the Executive Editor of HME Business and DME Pharmacy magazine. Follow him on Twitter at @postacutenews.

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