Healthcare's Last Mile
HME filled critical gaps in care & fortified referral bonds during Covid-19. Now what?
- By David Kopf
- Feb 01, 2022
Image © michaeldb/depositphotos.com
Some might consider it an exaggeration, but HME
providers helped save American healthcare during the
worst days of the Covid-19 public health emergency
(PHE). The reach of hospitals only extends so far, but
almost at the outset, HME providers showed they could
close that “last mile” gap between the hospital and the homecare
setting. If they hadn’t, one shudders to think how hospitals would
be faring at this moment.
Even before the public health emergency and the pandemic really
made itself felt in March 2020, many HME providers — and particularly
respiratory providers — were implementing telehealth solutions
and transitioning their back-office personnel to work-fromhome
arrangements. So, by the time the pandemic was hitting its
first bump up to 20,000 new daily cases in late March/early April,
many HME providers had already laid the groundwork to help mitigate
the pandemic’s impact.
When Covid-19 diagnoses started ramping up to more than
65,000 daily new cases in summer 2020 and then 170,000 in
winter, ICUs, CCUs and even entire units that were dedicated to
Covid-19 patients were quickly overwhelmed. Hospitals were
resorting to providing emergency services in military hospital-style tents erected in parking lots. The question being asked across the
entirety of U.S. healthcare was how were beds in hospitals going to
get freed up, even if that meant providing more acute care in the
“The primary part of healthcare that created that release valve
and opened up bed capacity is DME,” Marx says Josh Marx,
managing director sleep and vice president of business development
for Medical Service Company (medicalserviceco.com) in
Cleveland, Ohio. Marx adds that if a patient wasn’t going to spend
a long time (and perhaps their final days) in the hospital, then “they
were being discharged rapidly and put on oxygen.”
Early into the PHE, respiratory providers were working with
hospital discharge staff to accomplish a smooth transition.
“That’s where the DME space lives,” Marx notes, explaining that
providers are already adept at identifying how to support facilities-based
care. In the case of the Covid-19 PHE, they took it to the
“It’s about allocating your inventory and your personnel to be
in lockstep with the health system and understanding where the
points of patient buildup are,” he explains. “Is it in an emergency
department? Is it in the acute care setting? Where in the hospital
is the buildup, and what are the timelines that trigger those
discharges? Then how quickly can we be feet on the street to help
get that patient to the home safely so they can move another fragile
patient into the hospital?”
And, of course, there was the need to help hospitals continue
provisioning oxygen in the facility. There was certainly an increased
use of oxygen concentrators in the hospital setting. In the case of
Hometown Healthcare (hometownhealthrx.com) in Clifton Park,
N.Y., local hospitals weren’t reaching the point where they felt a
pressing need to get patients into a homecare setting, but they did
need additional equipment on site.
“One of the things the hospitals were asking from us was, do we
have equipment for the inpatient setting?” recalls Casey Toomajian,
CEO of Hometown Healthcare. “Because they just didn’t know if
they were going to have enough to cover the demand. So, we were
providing oxygen concentrators direct to the facility, and then
home vents directly to the facility as well.”
Getting back to the homecare model, Covid patients were
being sent home by their physicians with oxygen equipment or
were being prescribed oxygen devices even before getting to the
hospital. In either case, once patients were in the homecare setting,
the pandemic forced providers to reinvent delivering virtual care.
“Whether that’s educating patients on how to use their oxygen
equipment or doing a full CPAP setup on Zoom, up to the point of
troubleshooting equipment,” Marx says. “We perform more troubleshooting
virtually now than we ever did before, and part of that
is the safety factor of we don’t want to our technicians necessarily
in harm’s way.
“But the other opportunity is the ability for one technician to
take care of more patients and caregivers that need support in a
virtual environment versus driving 30 miles each way,” he adds.
“It’s just a little bit of a scalability game where we can take care of
the surge of demand that we’ve received.”
A PERFECT STORM
Of course, at the same time that hospitals started relying on
providers either to provide equipment for Covid-19 patients onsite
or in the homecare setting, HME providers were feeling the pinch
from other two other primary market forces, poor reimbursement
and supply chain constraints.
Poor reimbursement represents a constant problem for HME
providers as a whole, particularly with the 13 categories that CMS
did not award contracts for in Round 2021. Rates on those devices
have been frozen since 2016. While Medicare spending grew at a
rate of 3.5 percent to $829.5 billion in 2020, DMEPOS only represents
1.35 percent of Medicare’s budget. Programs such as competitive
bidding, which forced provider closures and consolidation,
have undercut what has proven to be an important component of
U.S. healthcare infrastructure — right when Americans needed it
“The DME network has been fractured and broken for so many
years because of public policy,” Marx says. “If there were more DMEs
that were able to facilitate that hospital discharge and care coordination,
we would free up beds faster, and hospitals wouldn’t need
as many beds then because they would be turning them quicker.”
(Editor’s note: When it comes to reimbursement, the industry
is seeing positive news. Turn to page 18 to read more about CMS’s
final payment rule for DMEPOS, as well as nascent legislation to
improve DEMPOS reimbursement.)
In addition to reimbursement, the industry is getting hit with
a double-whammy of supply chain problems. First, there is the
general supply chain problems that have hampered the U.S.
economy due to Covid-19 related
shipping and port slowdowns.
Soaring shipping prices have also
meant soaring equipment prices.
Second, HME providers are facing
product delays due to the shortages
of component electronics
and microchips in particular.
Right now, auto manufacturers,
consumer electronics companies,
and medical equipment makers
all rate the same when it comes to
tapping into the narrowed supply
“We need the government to
say, ‘not everybody that gets in
the deli line is created equal,’”
Marx says. “You would think
that products tied to the medical
community that’s specifically caring for Covid patients should take
priority for microchip provisioning. The same thing goes with
manufacturer recalls and how the FDA helps accelerate the Phillips
recall to make sure that we have an optimal supply of ventilation
units and CPAP devices.”
A PERFECT OPPORTUNITY
Fortunately, the industry has seen some relief during the pandemic.
The industry benefitted substantially from Covid-19 relief such as the CARES Act, the temporary pause on Medicare claims audits,
and the Paycheck Protection Program, as well as a CPI-U adjustment
that resulted in an average 5 percent DMEPOS fee schedule
increase that started the first of the year.
However, there is much more work to be done, notes Marx, who
is also the vice chair of the board of directors for the American
Association for Homecare (aahomecare.org). For instance, the
industry is working to extend the 75/25 blended rate for non-rural
areas beyond the end of the PHE, and apply a 90/10 reimbursement
rate to items in Round 2021’s 13 un-awarded categories.
“But we know that there’s so much more that has to be done as
it relates to truly right-sizing the reimbursement structure,” Marx
notes. “AAHomecare can do that, but we need industry-wide advocacy
and engagement to make sure that we’re all rowing in the same
direction, and have that scale to be heard by the federal government
and all the necessary government bodies such CMS and the FDA.”
Fortunately, because of the industry’s rapid Covid-19 response,
it might have some new allies. The industry has raised its profile
during the public health emergency, and hospitals, health systems
and other stakeholders took notice.
“I think that with the hospitals now observing what we do, more
than ever we’re going to have more leverage working with the health
systems to really underscore the value of homecare,” Marx says.
“When they needed that hospital bed freed up, or when they need
to clear out the parking lot of the emergency department, that they
know who they could call. There’s only one company that they call,
the DME company. I think that that is where the magnifying glass
has shined the most.”
Marx says that hospitals and health organizations are truly recognizing
the value of HME providers and not just seeing them as
another contractor. Rather, those stakeholders are seeing that getting
patients into the home helps them provide better overall care.
“We’re hearing that more than we ever heard it in the past,” Marx
says. “They understand that post-acute care is not an area that they
do well. … They have always known that hospice care and home
health nursing have been needed. But they never understood that
third leg of the stool, which is DME.”
And those stakeholders that come to rely on the value offered by
HME providers should make solid allies.
“I do think that there’s more attention from the hospital system
on what we do and why it matters,” Marx says. “We’re going to have
to find a way to leverage that, and collaborate for that support and
common advocacy over the long run.”
NEW CARE MODELS
In addition to leveraging providers’ hard work for fixes to very immediate
reimbursement problems, the sorts of new care employed to get
more patients in the home setting could help build a new future for
home healthcare services, particularly when it comes to respiratory care.
It’s important to remember that when HME stepped in to save
the day, it leveraged equipment that spells out a deeper value
“One of the things that I think could create more of that ‘hospital
in the home’ model is leveraging more of the premium respiratory
devices that are out there,” Toomajian says. “Leveraging their data
connectivity technology, to be able to track patients that have been
discharged, and look at things that would indicate if they’re stable,
or if they need some sort of more support to keep them in the home
and out of the hospital.
“For example, the home vent that we work with gives us information
about the patient’s respiratory rate, and gives us information
about how much of the machine is doing the breathing versus the
patient doing the breathing,” he adds. “… That technology would
allow us to not only support the patients, but if there is a problem,
get ahead of that so that they don’t go back into the hospital.”
According to data from CMS, national healthcare expenditures
are projected to hit 6.8 trillion in 2028. (As of 2020, they had hit
$4.1 trillion, according to the agency.)
“If you look underneath the hood of what’s driving increased
health costs, it’s chronic disease that’s being mismanaged,”
Toomajian explains. “And then you start ranking these diseases by
their biggest driver of cost, and you’ve got cardiac heart stuff at the
top. COPD, I think, is in the top five in terms of driving cost, and a
lot of that is just because of COPD exacerbation.”
Many of the COPD patients who can’t catch their breath to the
point they must visit the hospital to get stabilized, do so on a repeat
basis, setting up a very costly revolving door of admissions and
discharges that could be preventable.
“We’ve had some patients that have been admitted 20 something
times over a two-year period, simply because they have these
preventable exacerbations,” Toomajian says.
The telehealth and remote monitoring assets that providers put
in place during the Covid-19 PHE could prevent that and further
cement home healthcare’s value in the patient care continuum. The
question is whether or not healthcare possesses the uniform will to
build that model?
Not everyone is a fan of remote monitoring for oxygen services
beyond technical diagnostics. Remotely monitoring patient usage
and performance data for oxygen therapy might eventually get
that data tied to reimbursement in the same way sleep therapy has
remote patient monitoring tied to reimbursement. That scenario for
home oxygen care doesn’t come as a thrill to some folks.
“I can see people taking that view, and I respect that, because we
got to pay the bills, protect fee schedules, and protect our business,”
Toomajian says. “However, I see the alternative is that healthcare
costs are going to continue to rise, and the health plans and CMS
are going to try to need to find ways to offset those costs.”
And the way payers typically offset costs is through higher
premiums and cutting reimbursement rates.
“So, in my mind it would be short-minded to not get out in front
of this,” he argues. “I would like to have us as an HME community
figure out how to drive value, and then work on how we get paid for
lowering total cost of care.”
Obviously, a lot needs to happen to evolve care and funding
models to get to that point; as it stands CMS is completely unaware of
how much but how HME providers leveraged technology to rapidly
respond to the Covid-19 pandemic demonstrated what’s possible.
“We had, as an industry, the opportunity to serve as an extension
of the ER; to stabilize these patients at home in an urgent way,”
Toomajian explains. “That was a near-term need that the industry
stepped up and filled so that the hospitals could focus on their
sickest patients. … When this is over, chronic disease is still going
to be around.”
Free Webinar: Poised for More Growth
Why HME providers should invest in respiratory.
The role of home respiratory services play in U.S. healthcare
has expanded over the past two years, and respiratory
providers have sat at the epicenter of this growth. As hospitals
needed help confronting the Covid-19 public health emergency,
respiratory providers were there to facilitate more
primary oxygen care in the home — and that broader role isn’t
On March 10, 2022 at 2 p.m. Eastern, HME Business will host a
webinar sponsored by McKesson Medical Surgical that will
- The continued evolution of the respiratory category and the
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providers are providing.
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- How technology can create a more patient-centric respiratory
program to help drive improved outcomes.
Speakers are Brent Poythress, HME corporate accounts vice
president at McKesson Medical Surgical and Patricia Reni, the
respiratory clinical program manager for the McKesson Medical
Surgical Extended Care Division.
Register for this free webinar at hme-business.com/webinars.
This article originally appeared in the Jan/Feb 2022 issue of HME Business.