It is no wonder providers of home respiratory care are having trouble catching their breath: the uncertainty of competitive bidding, ramifications of the Deficit Reduction Act, skyrocketing delivery costs. No matter how any of these factors turns out, it is obvious this segment of the HME industry is facing monumental change — and providers must figure out how to deal with it.

NCB'S IMPACT

Whether you call it selective contracting, competitive acquisition or national competitive bidding, the result is the same. The Medicare DMEPOS bidding program will have a significant effect on home respiratory care providers.

“Competitive bidding is changing the fabric of our industry as we speak. Companies are wrestling with how to continue to provide good patient care with a staggering reduction in reimbursement,” says Patrick Clevidence, vice president of respiratory services for Cleveland-based Medical Service Company.

“We were fortunate to have won contracts in each category in which we bid. Unfortunately, with the reduction in reimbursement there is greater pressure to reduce expenses,” he adds. “Companies are going to have to invest in better delivery models and processes to increase productivity and keep costs to a minimum. If they do not, they will be out of business.”

Clevidence and others say the effect on patients also will be significant.

“Sadly, the biggest loser in all of this is the patient. Some companies are reducing their clinical services and staff, and others will provide equipment that is not focused on the patient's needs but on what they feel they can afford,” he says. “We have committed to provide the same clinical support and the best non-delivery oxygen models that will benefit our company and, most importantly, the patient.”

Adds Joe Lewarski, vice president of Elyria, Ohio-based Invacare's respiratory group, “The most obvious impact is the significant reduction in reimbursement — a reduction as draconian as that imposed by the Balanced Budget Act of 1997. Since Medicare is often the benchmark for Medicaid and other payers, this can have a negative ripple effect throughout the industry and extrapolate to non-bid areas and non-Medicare patients.

“The payment reduction raises concerns about patient access to clinically appropriate and ambulatory oxygen technologies, particularly new oxygen technologies, as providers struggle to service patients with such limited revenue,” Lewarski continues. “Clinical support, such as that provided by home respiratory therapists, is also at risk as providers look to reduce non-reimbursed costs from their businesses.”

According to Ralph McBride, vice president of HME/RT for Greensboro, N.C.-based Advanced Home Care, there will be numerous consequences for HME providers who offer home respiratory products and services.

McBride says the oxygen industry will see increased reliance on non-delivery models, increased dependence on manufacturer financing and a continuation of CMS challenging reimbursement rates resulting in providers diversifying their product portfolios.

Aside from limiting choice in providers and access to oxygen equipment, competitive bidding will also limit the number of pro bono services that have been provided unselfishly for years, according to Tom Pontzius, president of Nationwide Respiratory, a division of Waterloo, Iowa-based VGM Group.

“The Medicare benefit for home care has always been limited to ‘in the home.’ Because of the reduction in reimbursement and other legislation, the impact on ‘free’ services will be felt by the beneficiary,” Pontzius says.

Drew Devlin, clinical director of Landauer Metropolitan, Mt. Vernon, N.Y., says the COPD patient population will be significantly impacted as COPD management is a non-reimbursable service.

“Disease management is an area I feel we as an industry will need to work with very closely,” he says. “We need to look at ways to prevent exacerbations of this group of patients which eventually lead to increases in emergency room visits, physician visits and hospital admissions.”