Wielding the Numbers
Recent data seems worrying, but offers answers.
- By David Kopf
- Sep 01, 2017
It’s often said that the devil is in the details. Meaning, if you don’t pay attention to the finer points of an endeavor, you can undermine your whole effort. But God’s in the details, as well. A seemingly horrifying or overwhelming problem might offer its own solution on closer inspection.
I think both those truisms are especially important to keep in mind when looking at some recently released figures on the industry, particularly data on the population of HME provider businesses. Moreover, other data might become useful tools providers can employ to protect their businesses, industry and patients.
But before I come at this column from any more of an oblique angle than I already have, let’s approach these numbers head on, put them through their paces, and see if we can’t find some larger truths.
Decline in Providers
If there’s one piece of recent news that initially sent me into Chicken Little mode, it was the analysis performed by the American Association for Homecare on the quarterly Medicare Supplier Directory. AAHomecare does that to determine the number of HME providers currently providing services to beneficiaries. This includes providers of major categories, such as beds, NPWT, support surfaces, wheelchairs, and oxygen products. The association calculated 6,086 unique suppliers located at 9,810 locations nationally. When that’s compared to the 2013 population, the population of unique suppliers has slipped by a whopping 42 percent — in just four years!
Decline in Medicare Claims
A report from the Medicare Payment Advisory Commission (MedPAC), June 2017 Data Book: Health Care Spending and the Medicare Program, recently showed that Medicare reimbursement pays for just 16 percent of all spending on home medical equipment. The report also shows that DME’s portion of Medicare expenditures is shrinking. In 2005, DME comprised 2 percent of Medicare spending, but in 2015, it only accounted for 1 percent of Medicare outlays. In addition to Medicare’s 16 percent share, Medicaid accounted for 15 percent of HME spending, and all other sources, such as private payer and retail sales, represented 68 percent of HME spending.
You can look at these numbers a few ways. You can conclude that providers are shuttering left and right, or you can conclude that everyone is abandoning Medicare. I think the truth lies somewhere in between.
I have no doubt that competitive bidding is having a crushing impact on providers and patients alike. We know this. We’ve seen it in our daily lives. But MedPAC’s number also clearly demonstrate that there is a shift in non CMS-derived revenue. Whether it is private payer insurance or it is retail sales, or some other arrangement (such as institutional supply), we can clearly see that DME/HME providers have been diversifying their businesses like mad.
Now we’re seeing traditionally funded businesses are becoming retail businesses. A great example of that is retail power mobility provider Mobül: The Mobility Store, whose founder and president, Wayne Slavitt, gives some solid advice on retail power on page 26. He’s a great example of how some providers can not only diversify, but leave Medicare in their dust.
But of course Medicare is a fact of life for most providers, and bearing that in mind, we are also seeing efforts to create the kinds of data they can wield to protect the funded elements of their business. The Audit Key program just finished taking data for its second quarter effort. That information is not only used to help providers see how their audit experiences stack up against industry averages, but to lobby congress for reforms to an out-of-control audit program.
Also, The American Association for Homecare has contracted healthcare research group Dobson DaVanzo & Associates to help carry out a major study will collect perspectives from HME providers, Medicare beneficiaries, caregivers and hospital discharge planners and staff on how competitive bidding has impacted access to HME. The study is a response to regulatory policymakers and members of congress who have noted that information on Medicare beneficiary access to HME is critical to improving the bidding program and securing relief for rural providers. (To participate, contact Ashley Plauche, AAHomecare’s manager of government affairs, at email@example.com.) Those are the kind of numbers that will change policy.
This article originally appeared in the September 2017 issue of HME Business.
David Kopf is the Publisher HME Business, DME Pharmacy and Mobility Management magazines. He was Executive Editor of HME Business and DME Pharmacy from 2008 to 2023. Follow him on LinkedIn at linkedin.com/in/dkopf/ and on Twitter at @postacutenews.