Get ready for another full-scale assault on home care.
by Tyler Wilson

The home medical equipment sector is holding its breath this
fall for an assault on home care. In spite of making our voices
heard on the flawed "competitive" bidding program, Medicare is
going forward with the Round 1 rebid in January 2011. The bidding
window is scheduled to open on Oct. 21 and CMS would announce the
resulting contract suppliers next fall. Like the initial Round 1
last year, many observers believe cuts to HME payments will be
similar to bidding in the past when there was a total average
reduction of 26 percent.

And if that is not enough, the Senate Finance Committee's health
care proposal, which is being considered at the time of the writing
of this column, would speed up the implementation of the bidding
program. For HME providers who have long believed they would not be
affected by price setting based on competitive bidding — it
is time to reconsider.

The Senate Finance proposal contains a provision that expands
the number of metropolitan statistical areas included in Round 2 of
competitive bidding from 79 to 100. The provision would also
require that the bid program apply competitively bid rates to the
remaining non-bid areas by 2016. There is an allowance for the
Health and Human Services Secretary to make certain geographic
exemptions, but those exemptions are not automatic and require an
affirmative act.

The acceleration of the bidding rollout will cost home care
providers another $1.4 billion in reduced payments over the next 10
years while at the same time resulting in an anticipated shortage
of providers in any area where the program is being run.

Many HME providers are now deciding that they cannot afford to
continue to provide services to Medicare beneficiaries, and as a
result these providers may decide to pull out of Medicare, leaving
the neediest patients without the level of access and care that
they deserve.

Even those who choose to remain in business and discontinue
relationships with Medicare may find lower rates from private
insurance firms since Medicare reimbursement rates are the basis
for rates set by many other health insurance carriers.

The competitive bidding study released in August by Brian
O'Roark, PhD, of Robert Morris University in Pennsylvania, found
that as Medicare rates fall, insurance firms' rates fall, too. And
while insurance firms will enjoy profits, HME providers will be
driven out of business as the cost of supplying products and
services exceeds the reimbursement rate. This will lead to reduced
access for millions of seniors and patients.

AAHomecare strongly supports the elimination of the competitive
bidding program. The Association has asked all HME stakeholders to
contact their representative in Congress to urge support of
legislation that would repeal the program.

To ensure we have champions for this bill, everyone must be
speaking with their members of Congress and educating them on the
perils of competitive bidding. The perceived benefits of a bidding
program will never materialize. Any program that produces fewer
competitors, fewer home care services and lowest-common-denominator
health care for older Americans and people with disabilities is
wrong. Every provider must make a stand.

Speak up about the value of the home medical equipment sector in
your local news with facts and personal stories of how your
business positively impacts the community. Introduce your members
of Congress to your patients during site visits to your facilities,
and help legislators understand the role of home care in making our
health care system more cost-effective. Explain why the bidding
program will be counterproductive to ensuring quality health care
in your community, even if you are not in Round 1. Visit www.aahomecare.org
for talking points to assist in your efforts.

The Association is doing its part, but a united and energized
effort is needed to preserve home care.

Read more AAHomecare
Update
columns.

Tyler J. Wilson is president and CEO of the American
Association for Homecare, headquartered in Arlington, Va. You can
reach him at tylerw@aahomecare.org. For more
information on critical home care issues, visit the association's
Web site at www.aahomecare.org.