OAMES Battles Medicaid ‘Value Purchasing’

COLUMBUS, Ohio–Medicare competitive bidding is on hold
nationally, but a similar Medicaid program called “value
purchasing” is on the table in Ohio, and members of the Ohio
Association of Medical Equipment Services are prepared for a
fight.

Last week, OAMES Executive Director Kam Yuricich testified at a
public hearing on the matter before the Ohio Department of Job
& Family Services. Yuricich told officials the restrictive
nature of value purchasing for incontinence supplies would create
“inefficiencies and breakdowns in the continuity of care and the
myriad of health care professionals serving Medicaid
customers.”

Yuricich pointed to flaws in Medicare’s national competitive
bidding program and its recent delay by Congress. Ironically, she
noted, the day after the House of Representatives voted to stop
competitive bidding was the day the ODJFS filed rules to proceed
with value purchasing in the state.

“ODJFS has frequently pointed to the Medicare program as
one of the motives for implementing selective contracting in Ohio.
They’ve reported that ‘Ohio received an affirmative response to its
selective contracting Request for Proposal (RFP) for incontinence
garments from CMS on Nov. 2, 2007.’ In light of CMS’ own failure to
launch its program successfully, having the federal agency’s
approval offers no reassurance that Ohio should move forward. In
fact, for Ohio Medicaid to proceed with these rules and implement a
contracting program when CMS’ national model was just halted by
Congress is irresponsible and completely unfair to our state’s
Medicaid beneficiaries,” Yuricich said.

Yuricich said that while value purchasing currently only affects
incontinence supplies, OAMES is sure that additional DME will be
added to the program.

“While today’s proposed rule change only affects
incontinence supplies, we expect ODJFS will proceed with other
medical products as indicated by the blanket selective contracting
rule earlier this year. Thus, we wholeheartedly believe that the
careful coordination of a patient’s care by HME providers today
will unravel as more products are subject to competitive bidding
and more providers are eliminated by value purchasing,” she
said.

In 2005, a commission charged with drafting recommendations to
reform Ohio’s ailing Medicaid program recommended that the state
implement selective contracting for DME. But according to OAMES,
Medicaid programs in Pennsylvania, Idaho and Minnesota have all
abandoned efforts to implement such contracting for DME
products.

If Ohio chooses to go forward with its program, Yuricich said,
the state could see disastrous results. Instead, she asked the
ODJFS to pursue “true reform.”

“True reform can be achieved in an objective exercise
between the industry and ODJFS without dismantling the HME
community by auctioning selected health care services in a move
that threatens Ohio jobs, disrupts continuity of care and wipes out
personal and professional relationships between patients and health
care providers in their local communities,” she said.

“If home-based DME services are reviewed in isolation to
other Medicaid benefits, unintended consequences such as increases
in medical transportation or emergency room visits or poorer health
outcomes caused by decreasing patient compliance or delays in
timely hospital discharges, are likely to occur. This is not
‘reform’ but simply reducing costs in one benefit by shifting it to
another. We call it the ‘silo effect’ and it is a dangerous,
short-sighted logic for developing public policy.”

Yuricich told the ODJFS that if the state decides to proceed
with implementation of a selective contracting program, OAMES will
prepare “to make a case to invalidate the rule … We firmly
believe a government-run contracting scheme is not in the best
interest of the Medicaid program and its beneficiaries, the
taxpayers, health care professionals nor Ohio’s small
business community.”

OAMES reported that after the Aug. 12 hearing, ODJFS changed the
Medicaid incontinence supplies rule to ‘To Be Refiled’ status.

While this is a positive development, it does not mean the
program has been removed permanently, OAMES cautioned. The
organization said it would continue to fight the value purchasing
program for Ohio Medicaid and “will reach out to ODJFS
officials and request a meeting to openly discuss options to help
the department achieve its objectives without the implementation of
a controversial and anti-competitive contracting
program.”

Written testimony was also submitted by the American Association
for Homecare, The MED Group, the Ohio Pharmacists Association, the
Ohio Provider Resource Association and the United Ostomy
Associations of America.

To view OAMES’ full presentation at the hearing, click here.