Home Care Providers Question Survival Following DME Medicare Cuts

New durable medical equipment Medicare pricing announced last week by the Centers for Medicare and Medicaid Services left the home health industry “shocked” and “stunned,” according to reports and statements from those who provide home care services.

The Round 2 pricing under the current bidding system for DME equipment is unsustainable, industry advocates said, calling into question whether some business will be able to continue operating.

“The severe reductions in payment levels raises serious concerns about continued access to this vital equipment,” said the National Association for Home Care and Hospice in a statement. “If CMS ultimately goes forward with this plan, there is a absolute need for real-time monitoring on access and quality along with a rescue plan ready to be employed.”

Other organizations expressed a dire outlook based on the changes, calling into question whether the program is sustainable at all.

“It’s ironic that a program that is supposed to increase competition among providers is actually reducing competition, costing jobs in communities, and putting Medicare patients at risk,” said Tyler Wilson, president of the American Association for Homecare (AAHomecare). “This program is spiralling out of control. Providers, consumer advocates, and economists are urgently calling on Congress to adopt a better system.”

The new program cuts costs 45% with CMS projecting 72% in savings for diabetic testing supplies, for example. For businesspeople, however, the cuts can not be sustained and allow companies to stay in business, they say.

Providers nationwide expressed their frustration with the cuts, as reported in HomeCare magazine.

“I am stunned and numb,” Tom Ryan, past chairman of AAHomecare told HomeCare magazine. “I will lose up to 40% of my revenue in 5 months. This is my 25th year of business, and I will be struggling to make 26 years and not be a victim of a flawed government program. The suicide bidding we feared became reality.”

Written by Elizabeth Ecker