Editor's Note

2016's Last Best Shot

HME will push the 114th one last time for rural bid relief. Can we make a lame duck fly?

• By David Kopf
• Nov 01, 2016

You’re probably reading this column a few days before election day, and while political persuasions might vary across the industry’s membership, there is one unifying public policy opinion among the HME community: competitive bidding needs to change.

The question is, can we reform the program in time? Since national competitive bidding rates were fully applied to all providers nationwide on July 1, we have seen the nasty results of that policy: not only are rural providers hurting, but so too are all providers. Patients are clearly having difficulty getting their supplies and now many rural providers are telling major media outlets that they have hung up their hats when it comes to taking on new Medicare beneficiaries.

Furthermore, we have seen how the expansion has had a ripple effect. The case in point has been TRICARE, the medical insurance program that covers members of the military and their families. TRICARE started radically cutting its reimbursement in response to Medicare’s July 1 cuts and now many providers are unable to help this underserved healthcare demographic.

Enter the Lame Duck

The industry tried to reform the expansion countless times during the summer and came agonizingly close on two occasions, but disagreements between the House and Senate in terms of a pay-for sent the industry back to the drawing board. Then, in September, the industry tried to use the post-Summer recess session to squeeze in reforms before lawmakers recessed to hit the campaign trail in earnest. That effort didn’t pan out, either.

This leaves us the lame-duck session of the 114th Congress, which will run from when the elections have ended to when the 115th Congress takes over on Jan. 3, 2017. This will be the industry’s last best shot at securing a reform of national expansion in order to provide relief to rural providers and patients before the great, big chessboard of American politics is reset and the game of creating public policy begins anew.

And, like a limpy duck, these lawmakers will only have so much ability to drive public policy before their possible replacements set up shop. That said, this is the hand the industry has been dealt and the industry has proven that it can still pull out a decent hand or two when the legislative chips are down.

Bearing that in mind, as this issue goes to press, two useful pieces of information were just released that could help the industry build its case: First, the American Association for Homecare released a study that showed the reimbursement rates for items offered under the competitive bidding program were substantially less than the costs for providers to offer those products and services. This, of course, raises serious doubts about the sustainability of the program.

The study, which was performed by Dobson DaVanzo & Associates, surveyed costs and reimbursement for a wide variety of competitive bid items, and found that, on average, the reimbursement for the products surveyed only covered 88 percent of the overall cost of providing those products after all operational and purchase costs were factored in.

Second, the Government Accountability Office just published “CMS’s Round 2 Durable Medical Equipment and National Mail-order Diabetes Testing Supplies Competitive Bidding Programs” at press time, and it showed declined access to DMEPOS items in bid areas.

According to the GAO study, the number of beneficiaries receiving DME in Round Two competitive bidding areas generally decreased after implementation of Round Two, as well as the National Mail-Order Program. The GAO also found that some CBAs were only served by a single active supplier, or were dominated by a single supplier with a large market share.

These are important findings that might help the industry secure a win despite the lameduck session. The key will be for all providers to continue their active involvement in the industry’s advocacy efforts. If this is our last shot of 2016, let’s make it count.

This article originally appeared in the November 2016 issue of HME Business.