Business Solutions

The Tip of the Spear

Mobility faces a multi-pronged dilemma in the face of competitive bidding expansion. What can providers do?

• By David Kopf
• Nov 01, 2015

Even since the Affordable Care Act made the national expansion of competitive bidding the law of the land, mobility providers have been bracing themselves for the Jan.1, 2016 implementation date. Reason being is that no other segment of the HME industry will feel the point of that expansion more than mobility providers.

To be certain, the entire industry, as well as patients, will suffer from a national expansion. In basic terms, CMS will apply competitive bidding rates to DME items covered by the program’s categories to claims occurring outside the Round One and Round Two competitive bidding areas. (see sidebar, “How National Expansion Will Work”).

This is of particular concern to providers in rural areas, because they have no alternative. A provider in an urban area might opt to try other ways to drive revenue in the face of the expansion and ensuing cuts. They might expand into retail or more private payor, try new categories, or try to increase market share. A provider in a rural area can’t opt for those alternatives due to geography and demographics. Simply put, rural providers typically serve a very limited number of patients distributed across a wide region. The typical fixes don’t apply.

And that’s a big problem in that 16,285 of the zip codes covered by the competitive bidding expansion are classified as rural. Those providers will receive a 10 percent increase on their reimbursement, but that’s small solace in comparison to the much larger cuts power mobility has seen under the bidding program, as well as the average 45 percent cut across all categories that Round Two experienced. (To learn more about the impacted zip codes, turn to the “News, Trends & Analysis” section, starting page 8.)

Add to that the fact that CMS plans to apply competitive bid program pricing to complex rehab wheelchair accessories on a national basis as part of the competitive bidding expansion effective Jan. 1, 2016. The National Coalition for Assistive and Rehab Technology (NCART) reports that those cuts will reduce reimbursement for the affected CRT items from between 20 percent to 40 percent. That is serious business.

Bearing all that in mind, it’s not hard to understand why mobility businesses, and particularly complex rehab providers, find themselves at the tip of the competitive bidding spear.

Assessing the Impact

One thing the industry has been trying to determine is the percentage of Medicare beneficiaries living in non-bid, rural zip codes. This would give providers and other healthcare professionals — as well as lawmakers — some sense of the number of people that will be hit by the expansion. But that number is tough to find.

“We’re really trying to get our arms around what percent of beneficiaries live in ‘rural’ areas, and really, we don’t have a formal estimate,” says Cara Bachenheimer, senior vice president of Government Relations for Invacare Corp. “… It’s really difficult to even guesstimate because there’s no correlation between population density and zip codes, or anything like that. Zip codes are just delivery routes.”

“A lot of the areas we’ve looked at appear to be underserved to begin with,” says Tom Ryan, president and CEO of the American Association for Homecare. “These aren’t areas like the New York metro area where you have plenty of providers. There are not a lot of providers in those areas and we believe there are going to be access issues.”

Without having a second set of data, such as beneficiary statistics, to cross reference against the zip codes, it’s next to impossible to estimate how many beneficiaries (let alone those specifically using power mobility devices) in rural zip codes will be impacted by the national expansion. The process is akin to trying to triangulate the sources of a radio signal from only one point, rather than three. Bachenheimer says her informal estimate is roughly 40 percent of beneficiaries.

The most frustrating part of this endeavor is that anyone would have to estimate the affected population at all. The number is already known.

“We know CMS has the number, but they won’t tell us,” she says. “We know CMS has the data.”

And of course providers need to know, as well, so that they can try to come with some kind of plan to absorb the cuts. The industry has done some assessing based on the bid amounts in Rounds One and Two and applied CMS’s pricing methodology for the national expansion, and the cuts are considerable, says Seth Johnson, vice president of government affairs for Pride Mobility Products Corp.

“The cuts that are coming down the pike are significant,” Bachenheimer reminds. “And it’s only a six-month transition. But they are pretty dramatic cuts. If you look at the mobility sector, they’re 50 percent and in some instances more, when the full cuts are implemented.”

“When you see an upwards of 40 to 45 percent decrease in pricing in one fell swoop overnight without any increase in market share, it’s devastating,” Ryan says. “When you’re dealing with the extra cost of providing a rural area and you’re not getting an increase in market share, it’s devastating. The 10 percent increase is simply not enough.”

But, like the number of beneficiaries, the industry also knows that CMS has the rates.

“The exact calculations have not been provided by Medicare, yet,” Johnson says. “We are expecting the fee schedule amounts to be released sometime in November.”

And of course, when talking about complex rehab, the problems are only magnified.

“The ongoing concern and the challenge to mobility providers is that to continually be demanded to accept marginal reimbursements only exacerbates the problems,” says Ron Turzy, National vice president of Complex Rehab for U.S. Rehab.“And those problems are the challenges to provide equipment and service to those people who need it most — people who have physical disabilities that rely on complex rehab as part and parcel of their daily lives.

“Providers are simply going to reach a point where they’re simply not going to be able to accept these marginal reimbursements,” he adds. “And that’s going to create significant access problems not only in the rural areas, but in the urban areas. … If the reimbursement is marginal, sooner or later many of these providers are simply going to say ‘I can’t do this anymore.’”

Legislative and Grassroots Action

The efforts to protect complex rehab coalesced into actual legislation when Rep. Lee Zeldin (R-N.Y.) launched H.R. 3229 into the House to prevent CMS from applying competitive bidding-derive pricing to complex rehab wheelchair accessories. This legislation provides a technical correction to clarify that CMS cannot apply Medicare competitive bidding program pricing information to accessories used with complex rehab wheelchairs.

Various industry organizations called on providers to support H.R. 3229. NCART, the American Association for Homecare, and the U.S. Rehab division of VGM Group Inc. encourage providers to call on their Representatives and ensure they signed on as co-sponsors. At press time, the bill was up to 35 co-sponsors.

The American Association also advises that providers should check to see if their representative is among the 100 lawmakers who signed an April letter asking CMS for clarification in regards to the expansion plans and CRT. If so, then providers should remind them of that fact and urge them to sign on to H.R. 3229. The letter received strong bi-partisan support, and the full list of signatories can be found at bit.ly/1ZYu65V.

To address the expansion as a whole, the industry’s associations and legislative experts have been working with Rep. Tom Price’s (R-Ga.) to launch legislation that would take the sting out of the expansion. Specifically, the legislation calls for:

• Establishing a single-payment-amount-plus- 30 percent adjustment to help rural providers survive cuts that they could not replace with additional volume, due to the geographic limitations of their markets.
• Providing a four-year phase-in for the national price adjustments.
• Reinstating an unadjusted fee schedule as bid cap, instead of CMS proposal for cap at previous bid rates.
• Providing for a demonstration project for a market pricing program (MPP) approach, similar to the approach Rep. Price outlined in H.R. 1717 in the 113th Congress.

In the upper chamber, Dr. Price is working with Sen. John Thune (R-S.D.) to create companion legislation for the Senate, and Rep. Tammy Duckworth (D-Ill.) has agreed to be the Democratic lead for Price’s bill in the House. That said, as of press time, legislation had not been introduced, but the House and Senate bills were expected to be introduced by the time this issue reached readers.

“We believe, working with our champions, that we’re ready to go,” Ryan says. “We have a democratic co-sponsor [Duckworth] lined up in the House. … She’s key, and obviously a great get.

“And we’ve been working with Sen. Thune, and we’re working with both offices to get bicameral, bi-partisan bills dropped at the same time,” he adds.

The industry organizations also urged all encouraged providers, patients, caregivers and industry stakeholders to assist the industry’s Executivelevel outreach by signing their names to a petition to President Obama on the President’s “We the People” site that calls for preventing the cuts. If the petition is able to collect 100,000 signatures, then the President must formally respond to the request. At press time, the petition had roughly 26,000 signatures and wasn’t likely to meet its goal by deadline — but that’s not necessarily a bad thing.

“I think that it’s good that [the petition] has raised awareness of the issue,” Johnson says. “I hope that those who signed the petition also took the next step, which is to contact their Representative and asked them to support H.R. 3229.”

NCART has set up a webpage dedicated to the issue at cqrcengage.com/access2crt/HR3229 to give providers background documents they can use in their outreach as needed. The page provides simple email links and telephone numbers for lawmakers, as well as a position paper and other documents.

Provider Involvement

The one big issue is that timing is tight. By the time this magazine reaches readers, there will be less than two months before the expansion reaches its Jan. 1, 2016 implementation date. Factor in holiday time, and the industry has probably half that amount of time to lobby on behalf of their bills.

This means that providers must get involved and reach out to their lawmakers. Once the issue is explained, lawmakers should see that the industry is making a reasonable request in the face of unreasonable public policy. If anything, the industry should have good traction with lawmakers because the cuts are so massive and because large numbers of beneficiaries will be impacted.

“When you look at these cuts on a code-by-code basis … These cuts are hugely dramatic,” Bacheheimer says, noting that when legislators and staff on the Hill see the charts explaining the cuts, they are surprised. “I would describe it as we have a lot of sympathy right now, which is the first step toward political support.”

“We’re hearing from consumer groups and members of staff on the Hill who are very concerned about the effects of these huge cuts in these rural areas,” says Jay Witter, AAHomecare’s senior vice president of Public Policy says. “I think there’s growing interest in what these [cuts] are going to do and growing support for some kind of relief.”

And this is why the fight must involve grass roots support from providers and their constituents. The numbers paint a serious picture, and it is key for the parties who will be directly impacted by the expansion to each out to lawmakers and staff to make their case.

“This is very much a grassroots issue right now,” Bachenheimer says. “When [lawmakers’] offices are contacted and they see these facts? That’s when we get their support. And the facts are pretty glaring.”

Timing is Tight

Of course this all goes back to the big question is does the industry have enough time to advance its legislative aims? Even with traction with lawmakers, there’s still a lot of work to be done with standalone legislation. Lawmakers are working to come up with some kind of legislative package to prevent a 30 percent increase in premiums for Medicare beneficiaries. The ensuing legislation could become a suitable vehicle for attaching the industry’s competitive bidding expansion legislation.

“It’s almost must-pass legislation,” Johnson says.

Another alternative would be the legislation to fund the government in order to keep it running after the continuing legislation funding it runs out. “It’s just a matter of how all this comes together later this year, with other things that come into play, such as the House leadership elections, the holidays and everything else,” Johnson adds. “It looks like we will have some vehicles out there to move this, it’s just a matter of us continuing to do what we can to keep the noise level up and strengthen the level of support so that we’re in the best possible position to get this done.”

“It’s crunch time, and obviously we believe that there will be some piece of larger legislation,” Ryan notes. “But we hope this is dropped as a standalone bill in order to develop support and co-sponsors. If there’s enough support we could get this into a larger bill.”

“We’ve talked to the committees and leadership, and with everything going on, no one can predict what the next few months are going to entail,” Witter says. “But I think all those important offices understand the time sensitivity of this. They understand that we have to have relief by the end of the year. And there should be some bills moving from now to the end of the year.”

“It’s all going to fall into place,” Ryan summarized. “We have to be optimistic and work the plan and plan to work, but I think there’s enough momentum and enough empathy on the Hill and enough other stakeholders involved in the argument that we can bring this across the finish line.”

This article originally appeared in the November 2015 issue of HME Business.