Taking the Plunge

Imagine for a moment that you are in the Oregon Senate chamber, where a heated discussion is going on about the merits of cutting Medicaid reimbursement for home medical equipment. Some of your respected peers think this is a good idea. It saves money, they say. Others, equally respected, say it will hamper access and service. Who you gonna call to find out who’s right?

If you’re Oregon state Sen. Betsy Johnson, you’ll call Norm Stutznegger or Bob McLellan of Pacific Coast Medical Supply.

“They are the go-to people on [HME issues] for me,” says Johnson, who, during a floor debate, has been known to make a beeline for the bank of telephone booths at the back of the chamber and call her dentist or another trusted source in her Rolodex for information. “I operate on the trust-but-verify theory. I now have go-to people on that issue. It makes all the difference in the world.

“The fact that Norm has been foresightful enough to put somebody on point to watch their backs is a big deal,” she adds.

Making the Difference

How did McLellan and Stutznegger get to be Johnson’s “go-to” people on HME issues? By waking up to the fact that, though only small to medium in size, Pacific Coast Medical has a voice and it was time it was used.

“What I saw is that we were not doing enough … as a company to be an advocate for our patients,” says Stutznegger.

His full-line, Joint Commission-accredited HME company has three locations in two states: Astoria, Ore., and Longview and Vancouver, Wash. In the last several years, state HME issues have been cropping up more frequently, not to mention the morass of regulatory and legislative edicts flowing like lava out of Washington, D.C. Stutznegger had tried to deal with it himself, but it was tough to keep up and run the business at the same time. It was time, he decided, to dedicate one employee to working with legislators and educating them about HME.

In a bold move, he created the government relations position for McLellan, a retired helicopter mechanic for the U.S. Coast Guard, who started at the company in 2004 as a driver and then became operations manager.

“I charged him with making contact with every official at the state and federal levels twice a week,” Stutznegger says.

Since December, when he officially took on the job, McLellan has done that in both Oregon and Washington. He’s on a first-name basis with virtually all the legislators in both states and many, if not all, of their aides.

“The biggest challenge was making that initial contact with the lawmakers,” McLellan says. “I am dealing with Oregon and Washington state and federal legislators, so meeting with the actual representative or their aide has been something I have been doing.”

He’s also reached out to beneficiaries through local radio shows and he’s on the board of his state association, the Pacific Association for Medical Equipment Services, which has allowed him to keep close tabs on what is going on in both states — and that’s been a boon to legislators such as Johnson.

“They follow the legislature very closely and because of their industry engagement, they may know of stuff that is pending before I do,” she says. “So if they call me and say, ‘Your colleague is introducing a bill that really [has a devastating effect],’ I can go to my colleague and I can say, ‘Let me tell you what your bill will do.’ I have the chance to do a little behind-the-scenes work.”

Already, McLellan’s efforts have made a significant difference, he and Stutznegger say. “I think on the state level, just the amount of contact I have had with our reps has been educational for me and also for them,” McLellan says. “One of our state reps was very happy to sit down with me and explain why things were like they were and the best course of action we should take to have our voice heard.”

That would be Johnson, who has more than a passing acquaintance with HME, since her late mother required it.

“All of us have families. I didn’t know what a big deal it was to have a commode until my dear mother couldn’t make it to the ladies,” Johnson says. “I didn’t know how important a cane was with a lot of little legs or a wheelchair that doesn’t take two men and a boy to lift into the back of the car.

“We’re thinking about this stuff, whether caring for aged parents or thinking about it for ourselves,” she adds.

But for the most part, McLellan says, legislators are ignorant about the HME industry. “They have no idea,” he says, remembering one representative who asked how many people were affected by HME. McLellan began inviting legislators and/or their aides to one of the stores for tours and an explanation of how the industry works. He recalls one discussion with a legislator.

McLellan: “This is a hospital bed. What am I paid for?”

Legislator: “The hospital bed.”

McLellan: “Exactly. How does it get to the patient?”

Legislator: “I don’t understand.”

McLellan: “The people don’t pick it up. So how does it get to their home?”

“He gave me an hour and I educated him as best as I could about the industry,” McLellan says, adding that at the end of the time, the legislator said, “Well, now I understand.”

McLellan is attempting to achieve that kind of a victory with every legislator in Oregon and Washington. Prior to the congressionally mandated delay of competitive bidding, he was working hard to alert legislators to the enormous problems with the process and its potential impacts — even though the first round wasn’t going to affect Oregon or Washington.

“If it’s good enough for Cincinnati, it’s good enough for Portland,” he says. “If we don’t tell our senators and our congressmen that this is a bad deal for our patients, then who is going to?”

He adds, “We’re in the farthest northwest corner of Oregon and we are kind of invisible up here. We’re trying not to be.”

It appears to be working. Every U.S. senator and representative from Oregon and Washington voted in favor of H.R. 6331, the bill calling for the delay of competitive bidding; they also voted to override the president’s veto of the bill. McLellan sent emails thanking not only the legislators in his two states but also those in other states who voted for the bill and the subsequent override.

He didn’t work alone. McLellan got the rest of the Pacific Coast Medical’s 37-member staff involved, too. As the fight to halt competitive bidding heated up, he encouraged staff members to send emails and make phone calls as constituents to their legislators.

“Some were happy to do it and others were [asking] does this do anything?” McLellan notes.

But they all participated, in part, perhaps, because when McLellan was appointed to the position, Stutznegger made sure the staff knew what was going on.

“We explained to the staff what we were doing and why we were doing it,” he says. “And we were very bold, telling them, ‘Your buy-in is important, because your job depends on it.’ If we keep sustaining cuts in this industry and competitive bidding had come in, it would have devastated this industry.”

Going the Distance

Having McLellan on government relations watch, says Stutznegger, is not exactly a cheap proposition, and it would be a struggle for many HME companies to have an employee dedicated to such a position.

But it will be to their detriment if they don’t, he believes.

“They need to be involved,” Stutznegger says of providers. “They have to be involved. The days of riding someone else’s coattails have stopped.”

Legislators, he says, “don’t act on things that they don’t hear about. If people don’t commit someone to government relations, I think they are going to hurt their business.

“I know it’s hard with budget cuts, with the cost of doing business, rising fuel costs. It’s hard to budget that position, because what is the position producing? They are not producing revenue — on the front end. But they are on the back end by educating folks about this industry so they understand it.

“Getting involved has absolutely turned our business around,” he continues. “I believe we are helping not only us but helping the entire industry. The only way that we are going to be able to stave off some of these cuts is to use our voice.”

So, even though competitive bidding has been delayed for at least 18 months, neither McLellan nor Stutznegger believe McLellan’s job is done.

“Bob is switching his emphasis to the state level,” Stutznegger says, adding that two of the main counties in Oregon that Pacific Coast Medical Supply covers want to go with capitated contracts. McLellan will be working to educate policymakers about the impacts of such a move.

And for several years, Washington HME providers have been struggling to gain an exemption for HME from state sales tax. “We are trying to get a sponsor for that bill. I will be busy with that,” McLellan says.

He will also be fighting for the exemption of complex rehab from the 9.5 percent Medicare reimbursement cut for 10 DMEPOS product categories set to go into effect Jan. 1, 2009.

“There’s a lot of work to be done on that. And competitive bidding is only delayed 18 months. I don’t believe it is going away, so there’s lots of work to be done on it,” says Stutznegger.

That McLellan is staying engaged delights Johnson, the no-nonsense senator for Oregon’s 16th District. She values the relationship they have established. An attorney and former helicopter pilot for 20 years, she feels a connection to McLellan, the former helicopter mechanic, and she trusts him.

“We have done the heavy lifting of establishing the relationship before the fray begins,” Johnson says.

When issues come up on the floor of the state Senate, she explains, “sometimes, I don’t have time to engage in the relationship business.” She has time only to call someone she trusts, she says, and say: “I want to read you these three lines from the bill. They want to change the ‘or’ to an ‘and.’ Does that make a difference?’”

McLellan has made himself accessible for just such occasions, she says.

“Bob has been very generous in giving me all of his [phone] numbers,” Johnson says. “When a session starts and things are happening with the speed of light, I need to be able to get someone on the phone immediately. I can go right to [him] and say, ‘Is this crap or not?’”

That ability to reach a knowledgeable person who will tell the truth is key to her ability to be the best legislator she can be, Johnson says.

“I am armed then with the facts that make me a more persuasive debater with my colleagues because I know I have gotten reliable, timely information from someone I trust. The worst thing that can happen to a legislator is to make a point in a debate or public discourse and have it be wrong.”

She does not believe she is alone in this.

“The take-away piece is, I don’t think I am dissimilar from my colleagues across the country,” Johnson says.

“We welcome these kinds of relationships. I think in Oregon all of us are highly accessible. Our interest is in having the full array of facts prior to making a decision. I welcome knowing who my experts are in my district.

“The relationship is what it is about,” she continues. “It takes just a little effort to ring up their legislator and say, ‘Could I just come by for a bit?’ Create that relationship. Don’t wait until you’ve been run over by the bus to holler about it.”

The Value of a Good Story — and Someone to Tell It To

Like many in the home medical equipment business, Bob McLellan, government relations and corporate compliance director for Pacific Coast Medical Supply has some good stories to tell about how his HME company takes care of people.

The difference is, now he has somebody with muscle to tell them to.

McLellan learned the value of that firsthand just after he started his new position.

“Back in December, we got slammed with a huge storm up here,” he relates.

Though it was a perilous situation, with downed trees and electrical lines, McLellan and owner Norm Stutznegger made it into the store.

“We were without power at our store in Astoria for four days, but we had a generator and we manned the store 24 hours a day,” McLellan says. “The phones were knocked out, so for all of our patients who did not live in Astoria, we had to go and physically check on them.”

Pacific Coast employees used cells phones to text message for oxygen supplies to serve their own 125 patients and many others who were not their patients but needed oxygen. They set up stations in the store so people could come in and charge their batteries or do nebulizer treatments.

“We were there. We served four different fire departments and locations for ambulances [supplying them with oxygen for their calls],” McLellan says.

The company tallied $3,500 in oxygen costs alone, not to mention the time expended. For its efforts, Pacific Coast ended up with a new fire department contract. But perhaps more important, McLellan was able, because of his relationships with state and federal legislators, to get the information to them and expand their knowledge of what the HME industry is all about.

“When I tell the story they are kind of in awe,” McLellan says. “They [say], ‘Wow, I guess someone does need oxygen 24 hours a day and you guys do respond.’”

He hammers home the point, he said. What happens when a natural disaster like this happens on a larger scale, like Hurricane Katrina, and people’s homes are gone?

“There is some DME provider taking care of that person and, if not,” McLellan says, “that person is in the hospital for $4,000 a day.

“We don’t claim to be heroes,” he adds, “but you’ve got to look at the value of the dollar and what we are doing for beneficiaries.”

Taking the Bold Step

Considering establishing a government relations position for your company? Here are some tips from Norm Stutznegger, owner of Pacific Coast Medical Supply.

• Commit a single person to it. “That doesn’t have to be the only job they do,” Stutznegger says. The position can also be responsible for accreditation, compliance, etc.
• Be involved in your state association. This will help keep your company apprised of issues affecting HME in your state.
• Corporate officers need to allow the government relations person the freedom and ability to travel to different events and to visit their legislators.
• Make sure you get buy-in from the rest of the staff and that you have chosen a person for the position who is well respected by the staff.
• The person chosen for the position should have a good understanding of how the government works.
• Company management (and, if you have a board of directors, its members) must be committed to the position in spite of the fact that the person is not bringing in — directly — any revenue.