Industry Leaders: Battle Has Only Begun

ST. PETERSBURG, Fla.–As emergency officials met in Ft.
Lauderdale last week to make sure Florida is prepared for the 2006
hurricane season, HME executives gathered on the other side of the
state to fight the industry’s own perfect storm.

At the American Association for Homecare’s Leadership
Conference, which concluded on Tuesday, home care leaders convened
to assess the pressure on entitlement spending, preparation for
competitive bidding, drastic changes in Medicare’s oxygen
benefit–and how to stem the tide of further government blows by
educating legislators on Capitol Hill.

“We have a lot of challenges in this industry. You name it,
we’ve been hit by it,” said AAHomecare Chair Tom Ryan.

While the Deficit Reduction Act’s oxygen capped-rental provision
was the subject of much discussion at the three-day conference (see
“DRA Confronted with New Challenges” above), meeting attendees put
competitive bidding and all that will come with it at the top of
their worry lists.

“We’re standing on the expressway and we’ve got to look at the
closest truck that’s going to hit us,” said Tim Pontius, president
of Young Medical, Maumee, Ohio. “That’s obviously competitive
bidding and the whole issue of the supplier standards … When
competitive bidding begins, you’re going to have to play the game
by different rules.”

For most home care companies, Pontius continued, that means
making sure they can meet the government’s rigorous supplier
quality standards–which CMS has said it would finalize this
spring–in order to participate in the bidding program.

“I think there are still a lot of people out there who are
saying, ‘Well, I’m not in a top 10 [metropolitan statistical area]
or even in a top 25 MSA.’ But what you need to understand is that’s
only buying you a little more time … You’ve got to get your
business in a position to meet those standards so you can bid. If
you don’t, the truck is going to hit you from the back side and you
won’t even see it coming.”

Even with competitive bidding in place, however, keynote speaker
Robert Laszewski of Washington, D.C.-based Health Policy and
Strategy Associates warned the government’s hand may get heavier
still as the consequence of an overarching problem: Medicare and
Medicaid are simply unsustainable in their present form.

In the long term, Laszewski said, the pressure on these programs
will only grow, and budgets will have to be cut to levels the
government can sustain–not necessarily to levels providers will be
satisfied with. If health care costs continue to escalate, he said,
“That will lead to continued pressure on reimbursements, an
imperative to use health information to justify better payments and
a requirement to run your business more efficiently and effectively
than your competitors are able to do.”

That’s all the more reason, Ryan told attendees, to support
legislative solutions such as H.R. 3559, the Hobson-Tanner bill,
which would ease some effects of competitive bidding, and H.R.
4994, which would exclude rehab and assistive technology from the
bid. “We’ve got to stay in the battle,” Ryan said.

Pointus put it in different terms: “If the industry doesn’t get
[up] and get involved and try to effect some change in what’s
happening between now and 2010, I think 30 percent of this industry
is probably going to go away–and that’s a fairly conservative
number.”