2022 HME Business Handbook: HME Strategy

Preparing For Value- and Outcomes-Based Care For HME

HME StrategyOver the past decade, HME providers have worked through the competitive bidding process through multiple rounds, and then came the pandemic. We now wait in anticipation as to when the next round of competitive bidding will take place and the nuances it will surely bring to our services.

A shot over the bow is a phrase that has been used for centuries. This statement is a naval term used to describe when an opponent would shoot a shell or cannonball over the bow of a ship as a warning to strike fear into those on the receiving end of the shot. The shot over the bow warns that more is yet to come, and the next shot will be closer to the target — much closer.

Could our experiences as an industry with CMS’s competitive bidding program be that shot over the bow? While competitive bidding was much more than a warning — as we all know, its initial rounds radically reduced reimbursement for DMEPOS providers — it did strike our industry deeply, and the repercussions are still felt. With round after round, there were additional shots. Could there be yet another shot that is coming, and are the warning signs visible today? Even the pending next round is a potential warning for what is to come. So what is the big shot over the bow?


To answer this, look no further than the proposed 2030 plan from CMS to move 100 percent of payments to value-based and outcomes-oriented models.

CMS wants to move from a short-term focus on payment methods to a more long-term model that generates substantial savings and improves quality.

Today’s methods include four alternative payment models (APMs). These include:

  • Accountable care organizations.
  • Bundled payments.
  • Comprehensive primary care programs.
  • Medicare Advantage & Medicare Advantage Special Needs Plans.

The bulk of these are fee-for-service, with less than half of the payments made by the payer and payment category being linked to quality or value.

In 2015, then Health and Human Services Secretary Sylvia Burwell committed CMS to tie at least 90 percent of traditional Medicare fee-for-service payment to quality by 2018.


The bottom line is that all of these efforts, while increasing value, have not produced the savings CMS desires. The next step in this logical path is a value-based and outcomes-oriented payment system. Some of the nuances and learnings from fee-for-service models linked to quality and value, such as pay-for-performance, will certainly be considered and adapted.

As providers, we must lean into understanding how this value-based outcomes process will enter into and impact the post-acute care arena and to what degree? Some of these already impact skilled nursing facilities and home health agencies; it would be crazy not to assume HME is next in line.

There will most defenitely be challenges in both the creation and execution of this model. But we must get ahead of it. Value- and outcomes-based care and reimbursement models are coming, which will impact the way we conduct business, operations, and even the sales process.


It may seem that we have an eight-year window to prepare for 2030. While implementation might happen in 2030, surely the data collected and analyzed will begin relatively soon.

How will you prepare? What steps will you take to become a business that is driven by value and outcomes? What outcomes do you produce today? Are the outcomes you track today based on a device only, or how you are managing a patient holistically? What is your strengths, weaknesses, opportunities, and threats (SWOT) analysis as it relates to a value-based outcomes program for your business?

Be encouraged that this shot over the bow is real, and the subsequent shots will only get closer with a high degree of impact.


  • Various efforts by CMS to change the way DMEPOS is funded should stir providers into action.
  • It started with competitive bidding, but that should be seen as a shot over the bow.
  • It has already implemented four alternative payment models.
  • Those models set the stage for value-based, outcomes-oriented care and reimbursement models.
  • HME providers need to start preparing the business and sales models to adapt to these changes.


To learn more about Team@Work, visit teamatworkcoaching.com.

This article originally appeared in the May/Jun 2022 issue of HME Business.

About the Author

Ty Bello, RCC is the president and founder of Team@Work LLC, which offers more than 50 years’ combined experience in assessing, developing, and coaching sole proprietorships, sales teams, C-suite executives, individuals and teams in a variety of industry settings. Bello is an author, communicator and registered coach, and can be reached at ty@teamatworkcoaching.com for sales, customer call center, and management coaching needs. Please like Ty on LinkedIn and visit www.teamatworkcoaching.com for more information and join The Coaches Corner at teamatworkcoaching.com/coaches-corner.

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