More Medicare Patients Paying Up Front

In a 'no-win scenario,' beneficiaries wind up paying out of pocket for needed HME while some providers file non-assigned claims.

The organization People for Quality Care says that since the full implementation of the national expansion of competitive bidding rates on July 1, it has seen a 40 percent jump in the number of Medicare beneficiaries calling in to complain bout getting access to needed home medical equipment, supplies and service.

The expansion, which cut reimbursement rates for affected items between 50 and 80 percent, has forced some providers to file Medicare claims non-assigned, and require beneficiaries to make up the difference in cost and Medicare bid rates, the organization reports.

“40 percent of our calls are from patients and family caregivers who are now being asked to pay out of pocket for their home medical equipment that should be covered by Medicare,” reports Kelly Turner, director of Advocacy for People for Quality Care. “Many patients don’t have the financial capacity to take on this additional cost, yet the companies who serve them are operating in the red with Medicare’s current reimbursement. Both sides are being squeezed. It’s a no-win system.”

People for Quality Care shared one example from a Medicare beneficiary in Grand Island, Neb. the organization referred to as Terrie S.:

“I just a received a letter from my oxygen provider saying that they would not be taking assignment anymore, and I would be required to pay up front for my supplies,” Terrie S. said. "I am on a fixed income and don’t have the ability to do so.”

The situation is a result of a lose-lose scenario in which providers and patients have no alternative. This is especially true now that data has shown competitive bidding reimbursement rates are only covering 88 percent of the total cost of providing HME.

As an example of this plight, People for Quality Care cited 30-year-old rural provider Air-Way Medical in Bishop, Calif., whose owner Glenn Steinke said he was concerned over his company's ability to serve patients given the severely cut rates. Air-Way's rural service area covers 10,000 square miles, and Air-Way Medical is the only provider with a physical location within 150 miles that can serve Medicare patients. 

 “We’ve done all we can to save money,” Steinke said.  “I haven’t taken a paycheck since July. We’ve had layoffs, discontinued product categories, and are now billing nearly half of our Medicare claims non-assigned.

“If I am forced to go bankrupt, no one else is left to fill this void,” he added.

While some beneficiaries might be able to cover the cost of the difference, most cannot. Moreover, if they cannot, the increasing number of providers limiting their service areas, not taking Medicare assignment, closing locations, or closing up entirely puts patients at risk, People for Quality Care noted in a public statement.  

“If Congress doesn’t intervene, companies will stop taking Medicare all together or close, leaving patients with no alternative but to go without, resulting in increased ER visits, hospitalizations, and premature admissions to skilled nursing facilities,” the statement read. “Immediate legislative action is needed when Congress returns in November to stabilize the home medical equipment benefit and ensure patient access.”

The organization urged HME stakeholders to call the Capitol Hill switchboard at (202) 224-3121 to get in contact with their lawmakers and call for a legislative fix. Providers can get more information at the People for Quality Care website and the American Association for Homecare website.

About the Author

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

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