AAHomecare Testifies Before Congress on Drug Reimbursement
On September 21, American Association for Homecare (AAHomecare) President and CEO Thomas Connaughton testified before both the House Subcommittee on Health and Subcommittee on Oversight and Investigations of the Energy and Commerce Committee on the impending effects of lowering prescription drug reimbursement under Medicare on providers and suppliers of inhalation and infusion therapies.
Using a survey of these providers and suppliers commissioned with the independent Lewin Group, Connaughton alerted the Representatives that home care providers are not paid separately for administering infusion and inhalation services under Medicare, and, therefore, any cuts in drug reimbursement would hit these providers especially hard.
The Average Wholesale Price (AWP) survey report he used found that patient care service costs for the covered therapies vary greatly by type of treatment. The cost of goods represents 26% of total costs. Direct patient care costs average 46%. Indirect costs, such as accreditation, information systems, and Medicare/Medicaid regulatory compliance, amount to another 25%. Finally, in the case of infusion therapies delivered to Medicare beneficiaries, providers’ costs exceed the revenues, resulting in a negative operating margin of –22.2%.
“The costs to home care providers vary so widely among providers and suppliers that it is difficult to conceive of a system that accurately accounts for all of these variables,” Connaughton said. “We urge Congress to proceed with caution.”
AAHomecare’s plea may not have fallen on deaf ears. House Energy and Commerce Committee Chairman, Billy Tauzin (R-La); Health Subcommittee Chairman Michael Bilirakis (R-Fla); and Oversight and Investigations Subcommittee Chairman James C. Greenwood (R-Pa), drafted a letter on November 14, addressed to the Centers for Medicare & Medicaid Services (CMS) Administrator Tom Scully, that said Congress recognizes that providers rely on Medicare drug reimbursements to “make up for other Medicare payment levels, which they believe are inadequate.” It added, “Recognizing the seriousness of these concerns, our proposal will require that these specific issues be addressed simultaneously with any modification of Medicare’s drug reimbursements.”
CMS Turns Over A New Leaf |
| A letter issued by the Centers for Medicare & Medicaid Services (CMS) to American Association for Homecare (AAHomecare) Chairman David Savitsky on November 7 may prove CMS’ new interest in working with providers and suppliers to reduce unnecessary administrative burdens and improving the efficient administration of the Medicare program. In it, CMS agreed to make or consider several administrative changes proposed by AAHomecare members in a meeting with CMS officials last August. “We are pleased that CMS gave us the opportunity to discuss these important issues,” Savitsky said. “The letter...signifies a recognition that home health providers can be a valuable resource for CMS in improving the efficient administration of the Medicare program.” |
Medicare Reform Bills Move Forward
On October 31, the House Energy and Commerce Committee approved its version of the Medicare Regulatory, Appeals, Contracting, and Education Reform Act of 2001 (HR 3046). The bill will be merged with a revised version of Reps Johnson and Stark’s Medicare Regulatory and Contracting Reform Act of 2001 (HR 2768) that was passed by the House Ways and Means Health Subcommittee on October 11.
HR 2768 is an alternative to the Medicare Education and Regulatory Fairness Act of 2001 (MERFA, HR 868). Although it is not as expansive as the MERFA bill, it will pick up the provision from HR 868 that would limit recoupment of overpayments until a provider or supplier who appeals gets a decision from an administrative law judge.
Report Documents Growth of Home Care Overall home care industry revenues increased by 13% in 2000, compared to 10% in 1999, according to the 2001 Financial Performance Survey Report released by the American Association for Homecare (AAHomecare). The survey shows that a major factor contributing to this increase is that 8% of respondents reported making an acquisition, with the average growth rate of these firms at 31%. The report also shows that Medicare continues to be the dominant payor in 2000, representing 42% of revenue by type of payor compared to 31% in 1999. Medicaid increased to 26% by type of payor from 12% last year. These increases were primarily influenced this year by participation in the study of larger, consolidated companies. The survey also found in a new section on fuel and utility costs that companies reported an average increase of 32% in fuel expenditures for deliveries and on-site customer service. The 2001 Financial Performance Survey Report contains summaries and analysis of data collected from operations in year 2000, as well as managerial recommendations by the survey consultant, William Cron, PhD, professor of marketing at Southern Methodist University in Dallas. It can be ordered from AAHomecare by calling (703) 836-6263. |
News in Brief
Medicare Costs Rose in 2001
In 2001 Medicare spending increased more than 10% over fiscal year 2000, says the Centers for Medicare & Medicaid Services (CMS). Part B spending, for physician and outpatient services, rose by more than 13%. This is the largest spending increase for Medicare since 1995, when the government reacted to the increasing costs by passing the Balanced Budget Act of 1997 to get spending under control.
CMS Expands CPAP Coverage
The Centers for Medicare & Medicaid Services (CMS) has revised its policy of covering continuous positive airway pressure (CPAP) therapy for only moderate to severe sleep apnea to include patients with milder apnea or hypopnea. An effective date has not yet been announced.
IRS Mileage Allowance Raised
On November 6 the Internal Revenue Service (IRS) increased its standard mileage rate 2 cents to 36.5 cents, effective January 1. The IRS cited the rise in gasoline prices over the past year as the reason for the increase.
One-Year OSHA 300 Log Delay
Requirements to check the “MSD” column on the OSHA 300 Log to report on employees who experience a work-related musculoskeletal disorder will not take effect until January 1, 2003. The technical reporting change was scheduled to go into effect on January 1, 2002.
VGM Launches Internet University
Courses developed by HME professionals working with The VGM Group, Waterloo, Iowa, are now available online at www.vgm.com. The Internet-based education program for members of its buying alliances allows virtual students to enroll in courses ranging from “DOT Requirements for Drivers” to selling skills modules. A testing component allows managers to keep records on individuals and use them as annual performance reviews. For more information, call (800) 642-6065.
REHACare International Fair Turnout Up 10%
REHACare International 2001, 12th International Trade Fair for Those with Special Needs and Those Requiring Care, attracted 868 exhibitors from 28 countries and 48,700 visitors from around the world. The event held in Düsseldorf, Germany, had a 10% increase in visitors and exhibitors from last year.
The 2002 Trade Fair will take place in Düsseldorf on October 23-26. Information can be obtained by calling (312) 781-5180, or by visiting www.mdna.com.
Reshaping Apria’s Management
Apria Healthcare Group Inc, Costa Mesa, Calif, is undergoing several management changes. Tony Domenico is the new executive vice president of sales and James E. Baker is the new chief financial officer.
Sleep Disordered Breathing Teleconference
As part of its Homecare Education Institute, the American Association for Homecare (AAHomecare) Sleep Disordered Breathing Task Force has designed a teleconference series that runs from November 6 through January 8. For more information on registration, call Kim Kianka-Roberti at (703) 535-1887.
AAHomecare Developing eCMNs
In response to a September 18 release by the Centers for Medicare & Medicaid Services (CMS) of a revision to the Program Integrity Manual instructing the Durable Medical Equipment Regional Carriers (DMERCs) to accept electronic Certificates of Medical Necessity (eCMNs) that meet CMS privacy and security standards, AAHomecare is expanding a Working Group that will develop eCMNs for use in the Medicare program. Defining specifications and developing the software for eCMNs are the group’s first task. The association will then develop ways to make the product available.
Use Care With New ABN Forms
During the Medtrade keynote address, Centers for Medicare & Medicaid Services (CMS) Administrator Tom Scully said that the advance beneficiary notice (ABN) process—which allows Medicare beneficiaries to apply their reimbursement toward more expensive equipment—“is currently available.” However, don’t rush out and start using it just yet. The American Association for Homecare is urging members to proceed with caution because a program memorandum to the DMERCs (Transmittal B-01-64) contradicts Scully’s words. The memorandum is the official instruction on the use of the ABN form and it says HME providers using the ABN process before January 1, 2002, should expect delay and difficulty in processing claims involving ABN process upgrades. |
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