The Stakes Have Never Been Higher for HME
Various developments have aligned to set the stage for the industry to undertake its most aggressive advocacy campaign yet.
COVID-19 cases are falling, masks are coming
off, and social distancing is being replaced by handshakes and hugs. As
the pandemic fades, we are all cheered as everyday life edges closer to
back-to-normal. I know everyone in the HME community is proud of
our outsized contributions during the pandemic: providing exceptional
support to patients under challenging conditions, reducing the stress
on overwhelmed hospitals and clinicians, and treating individuals with
coronavirus-related respiratory issues at home. The value of homebased
care has never been more apparent than over the last 18 months.
But the relief HME suppliers are feeling is tempered by the reality our
industry will still be facing once the COVID-19 public health emergency
officially ends: a Medicare reimbursement policy that is disconnected
from the market conditions we face as an industry.
The American Association for Homecare and other HME stakeholders
encouraged CMS to provide a meaningful adjustment for Medicare rates
in the wake of the cancellation of competitive bidding Round 2021 for
most product categories. While allowing all qualified HME suppliers to
continue to serve Medicare beneficiaries as the COVID-19 pandemic
continued has proven to be the right decision in the interests of patients
and healthcare providers alike, the better reimbursement rates for many
products that resulted from hard-won improvements in the bidding
methodology have been sorely missed.
While we hope that CMS will provide meaningful rate adjustments
in the next iteration of DME rulemaking (which is overdue for release),
AAHomecare has been working with our champions on Capitol Hill to
develop legislation that would significantly boost Medicare reimbursement
rates in Competitive Bidding Areas (CBAs). Extending the current
50/50 blended Medicare rate for rural areas and the 75/25 blended rate
for non-rural, non-CBAs suppliers is also a priority for AAHomecare.
The Case for Realistic Rates
While Congress supplied welcome support to help suppliers during the
pandemic through healthcare provider relief funding for suppliers based
on their volume of Medicare and Medicaid care, as well as a pause for
2 percent Medicare sequestration cuts, our industry has had to contend
with rising product costs stemming from high demand for medical
equipment, raw material shortages, and supply chain issues.
Those higher product prices, coupled with increased costs associated
with new operational requirements, higher delivery and labor costs, and
new expenses for personal protective equipment and sanitizing showrooms
and delivery vehicles, are keeping margins slim or pushing them
into negative territory for suppliers.
While some of these expenses will diminish when the pandemic
recedes, the overall cost structure for most HME suppliers will almost
certainly be higher thanks to lingering supply chain issues and demands
for raw materials. Some of these costs may even increase as the U.S. and
international economies rev up over the next year; higher-than-usual
inflation in the United States is also widely expected.
Yet through all this, HME rates remain substantially unchanged
since 2016 except for small CPI adjustments. HME suppliers serving
Medicare beneficiaries (as well as individuals covered by Medicaid
plans and the large segment of other payers who peg their rates to the
Medicare fee schedule) have no way to pass along their cost increases
for products, fuel and labor, real estate, or any other short- or long-term
changes to their cost structure.
It’s Time to Win
The confluence of the three issues discussed above — HME’s proven
impact during the pandemic, higher costs for suppliers, and the lack of
significant Medicare rate adjustments since 2016 — all underscore the
urgency for our industry to take its most aggressive campaign yet to get
substantial relief for our industry over the next six months.
AAHomecare will be spearheading HME industry efforts to convince
policymakers to significantly increase rates for suppliers in former CBAs
and keep the current relief in place for suppliers in rural and other non-CBA locations on a permanent or long-term basis. While we will make
this case to the new leadership at HHS and CMS, I suspect that the road
to higher rates will ultimately run through Capitol Hill.
We have already laid the groundwork for this effort by engaging a
highly capable media relations firm to reinforce and expand the reach of
our messages on the value of homecare and the crucial need for realistic
reimbursement policy. And, as I noted earlier, we have spent months
working with established allies on Capitol and building relationships
with new legislators and staff.
Generating the kind of awareness and support needed to stand out
among other competing advocacy interests and convince Congress to
give our industry the most substantial rate increases in memory will
require our most sustained and aggressive advocacy campaign to date.
The HME community needs to be united and “all-in” like never before.
The time for this campaign will never be better, and the stakes have
never been higher. You will hear more about this effort web sites and
publications such as HME Business, from AAHomecare, our partners at
VGM, CQRC, NCART, and state and regional HME associations. As this
campaign moves forward, we’ll need you to reach out to your lawmakers
to make a case for Medicare rates that will let us effectively serve our
patients and communities. It’s time to fight for sustainable and marketbased
Medicare reimbursement rates, and it’s time to win.
This article originally appeared in the May/Jun 2021 issue of HME Business.
Tom Ryan is president and CEO of the American Association for Homecare (AAHomecare.org). Prior to assuming that role in 2013, he spent 25 years as the president and CEO of Homecare Concepts, a Farmingdale, N.Y.-based respiratory company that he had founded. Follow Tom on Twitter @TomRyanHME.