2022 HME Business Handbook: HME Strategy
Preparing For Value- and Outcomes-Based Care For HME
Over 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?
CMS’S OVERARCHING AGENDA
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).
- Accountable care organizations.
- Bundled payments.
- Comprehensive primary care
- 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.
VALUE- AND OUTCOMES-BASED CARE
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.
CMS’S OVER ARCHING AGENDA
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
Be encouraged that this shot over the
bow is real, and the subsequent shots
will only get closer with a high degree of
POINTS TO REMEMBER
- 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
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
This article originally appeared in the May/Jun 2022 issue of HME Business.
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 firstname.lastname@example.org 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.