HME Veterans: CMS Will Have to Learn the Hard Way, but at What Cost?

ATLANTA — Joan Cross is over — for the most part
— being mad. Now she is mainly just sad.

The home medical equipment industry she has known and loved for
decades is disappearing, done in by the Centers for Medicare and
Medicaid Services’ dogged determination to implement DMEPOS competitive bidding on
Jan. 1.

It’s a project she has fought for 20 years.

“[President Bill] Clinton introduced it when he first got in
office,” recalled Cross, a former long-time provider and now
executive director of the Florida Association of Medical Equipment
Services. She and her husband Alan were part of the lawsuit against
the Polk County demonstration project in the 1990s.

Despite the efforts of Cross and others in the industry, though,
competitive bidding is moving forward.

“It breaks my heart,” said Cross. “I’m almost past being as
angry as I have been these past 20 years. Now I’m sad … It’s
not going to be the same world. It can’t be.”

She worries about the good people in the industry who have
served well and long and who are now fighting to keep their
businesses alive. In a time when the country is struggling with
double-digit unemployment, they are having to let people go.

“A lot of people I have been talking to have been worried about
Round 2,” she said, referring to the next 91 areas that will be
subject to competitive bidding beginning next spring when bidding
opens. “They are cutting back on employees and benefits and trying
to save as much as they can for as long as they can.”

And she is concerned about the beneficiaries who are, she said,
unlikely to get the caliber or regularity of service they should
receive.

“We are probably better caregivers than businesspeople,” she
said of the industry as a whole. “Alan and I interrupted dinners
for years because someone called. People call in the middle of the
night and you get up and go. How can we turn that switch off? How
can we do it? We’ve been doing it so long.”

CMS’ policies seem aimed at sucking the compassion out of the
industry, according to Cross.

“‘Let me send it to you in the mail and you put it together’
— that just seems so impersonal,” Cross said. “It seems to
take all the compassion out of it. I know CMS thinks we are the
worst guys, but it is just flat out not true. I don’t see how you
can carte blanche name an entire industry a bunch of bad guys. You
don’t know me. Why can’t CMS come and meet us, see what we’re like?
They aren’t even respectful to us. It’s almost like you’d treat a
prison full of prisoners who are ready to riot. There is just no
respect.”

Industry veteran Tom Ryan, president and CEO of Homecare
Concepts in Farmingdale, N.Y., agreed with Cross.

“The devil we fought to stop appears to have won and its time
has come,” he said. “I actually feel that we are entering the
game-day battlefield come January 1.

“Now is the time to prove beyond a doubt what I and most in this
industry have said all along: The program is flawed,” Ryan
continued. “The patient quality of care and quality of equipment
they receive is going to diminish, [hospital] discharges will be
delayed, there will be added costs along the other continuum of
care and the most vulnerable members of our society — our
elderly, infirm seniors — will be forced to surrender to an
ill-conceived piece of legislation that CMS has so poorly tried to
implement.”

Dean Cheney, owner of Dallas Oxygen Corp. in Texas, who filed
suit against CMS for refusing to release financial standards for
bidders — and who was told he did not win bids because he
didn’t meet those unreleased financial standards — thinks the
only thing that will get the agency’s attention is if the program
implodes.

“I’m to the point where, just do it. Go ahead and do it,” said a
frustrated Cheney. “Let us show [CMS] how it’s ridiculous. They
keep telling us that they know what’s going on, they know it’s
going to save all this money and it’s going to help people, even
though there are 167
economists saying that it’s wrong. They won’t listen to us,
they won’t pay attention to us, they think we’re stupid. The only
way for us to prove it is for them to go ahead and do it and have
it fall apart.”

Unfortunately, he added, that means there will be casualties.
“The people who are going to be hurt are the seniors,” he said.
“They are the ones who are going to be damaged and, in some cases,
are going to die … The people at CMS do not understand what
is going to happen. They just say, ‘We’re paying too much for
oxygen.’”

Those CMS-advertised savings are likely to be bogus, he
said.

“What I see is going to happen is cost-shifting,” Cheney said.
Although it will pay providers less for HME, CMS will pay hospitals
more for hospitalizations for Medicare beneficiaries who could not
get the services they needed or the quality of equipment to keep
them out of the hospital, he said.

“That’s what I expect to see at the beginning of the year. It
absolutely makes no sense,” Cheney said.

Rose Schafhauser, executive director of the Midwest Association
of Medical Equipment Services, which has been among those in the
forefront of the fight to eliminate competitive bidding, said
providers are going to have to adjust to the change in the
industry.

“Nothing ever stays the same — and our industry is no
different,” she said. “The need for our services will only be
greater in the years to come. It will take strong strategic plans
to be profitable, but it can be done. It will take creativity and
vision to look at opportunities that are outside our comfort
zone.”

But first, providers have to deal with some painful realities.
Rob Brant of City Medical Services in North Miami Beach, Fla., and
a vociferous opponent of competitive bidding, is already dealing
with the fallout from the project.

“I laid off half my staff last week and I’m a bid winner,” Brant
said. “At this point, I am trying to survive, and at this point,
there is only so much that we can do.”

It shook him up to let people go, especially at this season of
the year. Some of them had been with him the majority of the 13
years he’s been in business. “It was very difficult,” he said.

But he needs to be prepared for chaos. Once competitive bidding
is in force, “they are really going to understand how flawed this
program is,” Brant said. “It’s going to be crazy … The
economists have said they have never seen an auction like this.
It’s unbelievable that a system like this is moving forward.”

While some in the industry are calling for a redesign of CMS’
competitive bidding plan, Ryan said he is hoping for something
more.

“Before I commit to a redesigned auction as suggested by some
renowned economists who have spent their careers in auctions, I
want to prove this is a disaster and get it delayed
administratively so we can look at alternatives beyond
administrative pricing that can manage costs but improve services,”
he said. “This fight is far from over!”

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