Medicaid Headaches

Organize, testify, work with legislators and consumer groups — and don’t give up. Those are some of the lessons from HME providers in states that have considered proposals to impose new Medicaid contracting systems on home care providers. These proposals are labeled selective contracting, “competitive” bidding, “value purchasing,” single-source contracting or bulk purchasing.

In an era of tight budgets, these proposals are likely to continue popping up in state houses throughout the U.S. But if these Medicaid modifications were to be implemented, the unfortunate effects would be reduced access to essential medical supplies, fewer choices and fewer providers to serve the health care needs of vulnerable seniors.

Moreover, they would impair rather than enhance the federal cost-saving efforts to shift or “rebalance” Medicaid beneficiaries away from expensive nursing home care and toward cost-effective home care.

The purchasing proposals have emerged in a number of states including Indiana, Ohio, Florida and North Carolina, to name a few. The efforts by state HME associations to address those proposals have been heroic and offer important lessons.

• In North Carolina, a bulk-purchasing program was recently proposed in the General Assembly. Beth Bowen, executive director of the North Carolina Association of Medical Equipment Services, has been working to convince lawmakers that there are better ways to approach cost-saving. She notes that state health officials and legislators have agreed that “single sourcing the entire DMEPOS benefit isn’t in the best interest of Medicaid patients, providers, or the state’s economy.” Bowen said the HME community is making progress on the issue. “We are working with legislators on budget compromises that will benefit the DME industry, protect the DMEPOS benefit as it is, and save North Carolina even more money.”
• George Kucka of Fairmeadows Home Health Care in Schererville, Ind., said the single-source provider proposal emerged in that state several years ago when the governor said, “The state can’t afford 10,000 providers.” Since then, attempts to consolidate the HME provider community have cropped up several times. “In April of 2007, the state Medicaid department unceremoniously notified the Association of Indiana Home Medical Equipment Services that it would start transitioning all incontinent, ostomy and urological supply purchasing for traditional Medicaid patients to a single source in June with the completion of the transition by September. AIHMES mobilized members and legislators and was successful in getting the project stopped.” But Kucka says legislators in Indiana ultimately would like to move to a single-source or limited-source provider system for a wide range of HME items. “We are regrouping for the fight next year,” says Kucka, AIMES treasurer and legislative committee chair.
• In April, the Florida Alliance of Home Care Services went to Tallahassee to fight proposed legislation that would have authorized creation of a competitive bidding program for Medicaid waivers, and specifically for disposable incontinence supplies.

“Legislative language authorizing competitive bidding was inserted into the state’s major appropriations bill in spite of the fact the Agency for Health Care Administration [Florida’s Medicaid agency], the providers and the patients did not want it,” commented Roger Ribas of Hometown Medical Supply in Doral, Fla., and FAHCS president.

FAHCS crafted a plan for grassroots issue advocacy, combined with political outreach and professional lobbying. Fortunately, the initiative died after intense protests by HME providers in the state.

No matter what state you’re in, these purchasing proposals are not the solution for state budget shortfalls. Nor do they represent Medicaid reform or concern about patients.

Watch for them. As George Kucka observed, “This is a nationwide issue. Each state needs to be vigilant and watch out for signs of these initiatives in their states.”

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 [email protected]. For more information on critical home care issues, visit the association’s Web site at www.aahomecare.org.