What's ahead for the industry and how can you prepare?
by Kristin Easterling
October 8, 2015

The home health care market is rapidly changing. The Affordable Care Act and competitive bidding have brought new regulatory challenges to the HME/DME marketplace. The pressure to compete has driven many small dealers out of business—and driven others to the top of their game through focusing on cash sales. Similarly, home health care workers are restricted by complicated Medicare reimbursement rules. DME providers and home health care providers are at a unique crossroads to become patient advocates and partners in increasing the quality of care for their patients. We spoke with several industry leaders about the emerging trends and challenges in the marketplace and how providers can best work together to navigate this challenging environment.

Mike Hamilton is the executive director of the Alabama Durable Medical Equipment Association (ADMEA). In his years of experience as an advocate for the HME/DME industry, Hamilton has seen many policy changes come and go. He advises home health workers and DME dealers to "become thoroughly familiar with what the other group does" in the health care market. He added, "We need to know about the rules that affect what services are available, so each group can make informed recommendations [to their clients]."

The COO of Pyramid Home Health Services, Cale Bradford, shared his opinion of Accountable Care Organizations (ACO) and the importance for a provider to become a member of one. ACOs allow members to join"bundled payment initiatives, bringing their business in line with the Centers for Medicaid and Medicare Services' (CMS) Financial Alignment Initiative." Further, becoming a part of an ACO allows physicians, home health providers and HME providers to successfully manage a patient's care throughout the course of treatment and recovery without violating the False Claims Act's Anti-Kickback Statute.

Jeff Baird, chairman of the Health Care Group of Brown and Fortunato, P.C., agreed. "As ACOs assume responsibility for an increasingly large patient base," he said, "the ACOs will control referrals to ancillary providers such as Home Health Agencies (HHAs) and DME suppliers." HHAs and DME suppliers need to become a part of the referral process by joining their area ACO, Baird recommended.

Among the challenges hospitals face today are readmission penalties—that is, Medicare fines the hospital if a patient is readmitted for the same issue less than 30 days from their last admission. Our experts agreed that better coordination between providers and physicians is the best way to keep patients healthy and at home. Physicians share information about patients with DME providers and HHAs (with the patient's permission, of course), and this enables the home health provider to deliver the best possible care. When a pharmacy is added to the mix, the pharmacist is able to partner with the HHA to ensure patient compliance with medication regimens. Facing the challenge of keeping patients healthy is going to be a major focus for home health care providers in 2016 and beyond.

The challenge of competitive bidding is clearly changing the home health care market. The nationwide roll-out is in 2016, and 2017 will be a bid opportunity for suppliers in new Competitive Bid Areas. Under competitive bidding, DME suppliers face the decision to work with CMS' set bid prices or go to a cash-only retail business model. Many suppliers have already made this decision. Baird noted, also, that many affluent baby boomer customers simply do not want to deal with the hassle of waiting for Medicare reimbursement. "The boomer recognizes that when he turns 75 years old, he will likely be dead within 10 years. And so the most precious asset he has is time. The boomer will want to take out his Visa and pay for the product rather than having to mess around with Medicare." The challenge for the DME retailer is finding a balance between Medicare reimbursable items and cash sale items that will appeal to a wide range of customers.

The challenges for the home health industry are clear. Providers who are able to coordinate services and keep up with changing policy will come through and be there to continuing serving patients at the end of the day.


FAST FACTS

A bite-size look at accountable care organizations and their growth across the united states

  • There are two main Medicare ACO programs: the Pioneer ACO Model and the Medicare Shared Savings Program. A third, the Advanced Payment Model, falls under the Shared Savings Program. Physicians, hospitals and other providers may only participate in one Medicare ACO.
  • According to CMS and the U.S. Department of Health and Human Services (HHS), ACOs are estimated to save the Medicare program up to $940 million in the first four years.
  • Medicare ACOs represent 52 percent of all ACOs. There are more than 250 organizations contracting with CMS for accountable care, according to a August 2013 Leavitt Partners report.
  • ACOs require a strong network of primary care physicians to manage the health of a population. Goals include improved care coordination, enhanced preventive care delivery and the reduction or elimination of duplicate services.
  • As of February 2013, ACOs covered between 37 million and 43 million Medicare and commercial patients, according to an Oliver Wyman report.
  • The expansion of coverage comes after CMS's announcement of 106 new participants in the Medicare Shared Savings Program. There are now 259 Medicare ACOs.
  • According to a Leavitt Partners report, in August 2013 there were 488 health care entities practicing accountable care.
  • Unlike a health maintenance organization, beneficiaries do not join ACOs—providers do. Patients are notified of their providers' participation in a commercial or Medicare ACO.
  • Along with physician groups, health systems and insurers, ACOs can include a range of care settings. These include inpatient rehabilitative facilities, long-term acute-care hospitals, skilled nursing facilities and small physician practices. Physician groups are the largest leaders of ACOs; hospital systems are a close second.
  • Provider organizations can participate in both Medicare and commercial ACOs at the same time.
  • More than half of the U.S. population lives in areas served by accountable care organizations, according to a new analysis by Oliver Wyman.
  • Currently, 52 percent of U.S. patients live in primary care service areas served by ACOs. In August 2012, just 45 percent of the population lived ACO areas.
  • Additionally, at least 28 percent of U.S. patients live in areas served by two or more ACOs.