By Paul M. Bergantino

Developing one voice can solve many of the rehabilitation industry’s problems.

Economically, rehabilitation technology is an important industry for both those who work in it and those who benefit from it. The industry numbers vary depending on the source, but my best calculation is that it consists of approximately 350 providers reporting $1 billion in total revenues.

However, despite this industry’s size and value, it is facing a significant number of challenges that could jeopardize not only its continued success, but also its ability to fully serve the disabled community.

As rehabilitation technology providers, we experience high costs per transaction and wait 3 months or more postdelivery to receive payment. We are highly regulated and, as a result, are at risk of civil or criminal penalties if we do not follow the rules—many of which are subjective at best. In the end, many rehabilitation technology providers report single-digit profitability.

As reimbursement continues to evolve and regulatory issues are sorted out, we face a changing environment. Providers are working to understand and develop a position on how their companies will be affected by many issues, including reimbursement, Medicare coding, repair reimbursement, Advance Beneficiary Notice (ABN) use, the homebound definition, and provider accreditation.

Reimbursement
I believe the primary issue we face is the lack of timely and appropriate reimbursement for the services we provide. In most cases, payors require rehabilitation providers to follow expensive, manual prior authorization and claims processes. Payors think nothing of paying suppliers in 90 or more days. Furthermore, this problem is magnified because payors use reduced and/or extended payments to offset their struggles. In many states, Medicaid programs are spending less to reduce their growing deficits, and managed care payors also are squeezing providers to offset their shrinking profits. A number of our local payors have reported losses, stopped covering Medicare beneficiaries, and cut back on covered services.

As the payors continue to reduce reimbursement, we need to embark on a major education process with the goal of increasing reimbursement rates and extracting costs from the burdensome prior approval and claims processes.

Medicare Coding
This is the largest ongoing industry project and I believe it will impact the industry significantly. Led by the American Association for Homecare (AAHomecare) Re/hab and Assistive Technology Council (RATC), the industry is working with the Centers for Medicare & Medicaid Services (CMS) to establish Healthcare Common Procedure Coding System (HCPCS) codes and coverage criteria for seating and positioning products, mobility devices, accessories, and repair services. This is necessary because all private and public payors must use Medicare HCPCS codes, instead of their own codes, once the Health Insurance Portability and Accountability Act (HIPAA) goes into effect in October 2003.

Thanks to a team of 15 hardworking individuals representing both manufacturers and suppliers, the RATC’s Coding Task Force submitted 22 consensus HCPCS code applications to CMS prior to the annual April 1, 2002, deadline. By this November the RATC will be notified as to whether these new codes will go into effect on January 1, 2003. Meanwhile, the RATC will continue to submit code applications every 60 days.

Establishing these codes can provide many benefits including demonstrating the importance of being proactively involved and providing consistency for both payors and providers, thereby reducing training and processing costs and improving the timeliness of payment. However, this project will take time to implement, and, although I support its direction, I am concerned about its potential risks. New codes will mean one more transition to live through, and payors may take this as an opportunity to continue to reduce reimbursement rates. The RATC workgroup needs more participants and financial support to drive this industry-changing initiative.

Repair Reimbursement
Repair services are an important part of providing rehabilitation technology. With data collected from the industry, the RATC has drafted a position paper demonstrating that providers lose approximately $150 per repair service transaction. Responsive repair service is vital to the rehabilitation technology consumer and a critical component of how rehabilitation providers are measured. When consumers have mechanical problems, they need and deserve a timely resolution.

Although both payors and consumers consider repair services crucial, most payors reimburse providers only for the “wrench-turning” time. The many non-reimbursed costs—drive time, research technician time, and purchasing—cause many providers to cut back on services.

Our company estimates that we lose tens of thousands of dollars per year on our repair services. For the past 2 years, we have been exploring ways to provide more for less. Some of the options we have identified, to reduce losses and/or realize a break-even status, were so extreme that we elected to redirect our approach. Although we are improving, we continue to operate our repair services segment in the red because we must continue to service our consumers.

To solve this problem, we must change the reimbursement structure. The RATC is starting with Medicare. It submitted the position paper to CMS and will schedule a follow-up meeting to discuss the specifics.

Advance Beneficiary Notice (ABN)
Beneficiaries, manufacturers, and providers have waited years for CMS to implement the Option Upgrade process. This program allows Medicare beneficiaries to pay for the upgrade difference between a “covered” product and the item desired. Well, it is here, but very few providers appear to have used the new process.

I think that this program will have more widespread use in the near future. It has the potential for a major positive effect on consumer access (choice) and on the industry overall, but providers first must attempt to understand the rules and potential ramifications for implementing the ABN.

Our company has found that the only way to be informed and prepared to make the right decision, to properly address issues such as the ABN/Option Upgrade, is to be involved with both the AAHomecare RATC and the New England Medical Equipment Dealers Association (NEMED), our regional association.

Homebound Definition
As the current Medicare statute is written, patients who need HME can have this covered by Medicare only if it is used inside the “four walls” of the home. AAHomecare is currently working with members of Congress to clarify this language, enabling HME to become available to consumers with disabilities for use outside, as well as inside, the home. Frankly, I find it appalling, and contradictory to the Americans with Disabilities Act and other enabling programs, that the “medically necessary within the home” criterion still exists.

Provider Accreditation
The Re/hab Accreditation Process (AP) is a program designed specifically to define, measure, and accredit the standards and core competencies of the rehabilitation technology provider. Sponsored by the RATC, this program has just sent out bid packages for third parties to bid on developing a set of standards to be used in this accreditation program. Most agree that, as providers, we have the responsibility to set the standard and continually raise the bar—we owe it to our customers and payors. This project will take the currently available accreditation processes to the next level by individualizing the programs for rehabilitation providers.

Creating One Industry Voice
These are just some of the issues that rehabilitation technology providers face. We are also concerned about such issues as addressing staff certification needs, becoming HIPAA compliant, and dealing with competitive bidding.

We are at a critical juncture. If we do not unify and contribute on some level, we will cease to exist. Imagine an industry with a solid industry plan and one focused voice—what we could accomplish! This unified voice would be composed of providers and manufacturers, as well as a strong affiliation with consumer groups, all working toward a common goal. For example, we might focus on one legislative issue that would benefit both consumers and our industry. Working together, we could rally the manufacturers and providers; coordinate with the consumer groups; raise funds; and develop and implement a strategy, including a letter-writing campaign and in-person lobbying days. By taking these steps together, we could drive the change we are seeking.

We must avoid creating separate associations and coalitions that further fragment our already small industry. Currently, the AAHomecare RATC has just 70 members out of approximately 350 rehabilitation providers. We need universal participation. Join, actively participate in, and contribute to AAHomecare, the RATC, and your local state/regional association.

We work in a challenging environment, but it can and will be improved by developing one industry voice. Despite all of the problems, we stay in this industry because we can help people and make a real difference.

I love this industry and I hope that soon we will experience the power of having one voice.

Paul M. Bergantino is president of ATG-New England, a rehabilitation equipment provider with five locations in Connecticut, Massachusetts, and New York. He is a past president of NEMED and vice chair of the RATC. For more information on the RATC, contact its executive director, Mary-Lacey Reuther, at (703) 535-1892, or mlreuther@aahomecare.org.