Evidence-based data will be crucial in the efforts to cultivate home health champions in Congress.

For the first in an occasional series called Washington Watch Round Table, we asked Vernon R. Pertelle, MBA, RRT, CCM, to act as guest moderator and facilitate a discussion about the legislative future of home care. Pertelle is director of respiratory services for Apria Healthcare Inc, Lake Forest, Calif. This month features Cara C. Bachenheimer, JD, vice president of government relations for Invacare Corp, Elyria, Ohio; Rita Hostak, vice president of government relations for Sunrise Medical, Longmont, Colo; Darren Jernigan, director of government affairs for Permobil Inc, Lebanon, Tenn; and Seth Johnson, director of government affairs for Pride Mobility Products Corp, Exeter, Pa.

Pertelle: Given the challenges with justifying the value of our industry as an essential component in the continuum of care, how important is it for home care providers to begin developing outcomes/evidence-based data?
Cara Bachenheimer: Outcomes/evidence-based data—or any other solid data—that demonstrates the real value HME providers offer is increasingly critical as both private and public payors search for ways to pay less for quality health care services. Our industry has long had the problem of quantifying the real value consumers realize as a result of having access to quality products and related services. The value is intuitive, but not easily demonstrated by facts and figures. This must be a key priority for our industry—now!

Rita Hostak: Reimbursement has been declining for years, and technology is viewed as one size fits all. The least costly alternative policies often do not allow access to appropriate technology. There is a growing need to validate cost savings and quality outcomes as a result of home care products and services. It will take time and money to create this data, but this is the solid foundation this industry needs. We can’t keep doing the same thing over and over and expecting different results.

Darren Jernigan: Evidence-based data must be the future when justifying medical necessity. The people who review claims will hopefully respect scientific medical studies. Unfortunately, when money is the bottom line in a state Medicaid plan, for example, there is tremendous pressure to reduce costs regardless of the evidence.

Seth Johnson: Developing outcomes/evidence-based data is one of the most important things the industry can do this year. Our friends in Congress continue to request independent data to assist in their fight to preserve home care, and we need to provide it to them. Most legislators agree that it is more cost-effective to keep a Medicare beneficiary at home and out of an institutional setting, but it has been difficult to show this because of the way Congress looks at cost savings. To them, an increase in home care spending is an increase in spending regardless of the fact that the increase is responsible for more significant savings in another area of the overall Medicare program. Developing outcomes-based data that show a reduction in inpatient stays or emergency department visits for Medicare beneficiaries that use home care products and services is essential.

Vernon Pertelle: Is it necessary to begin to provide evidence-based clinical data (regarding new medical devices) to get appropriate HCPCS codes with appropriate reimbursement?
Bachenheimer: Evidence-based clinical data for new devices would certainly assist in obtaining new HCPCS codes if there is sufficient differentiation from existing products in existing HCPCS codes (in clinical use and therapeutic application).

Hostak: Recent changes in the HCPCS code modification process have established evidence-based data as an element of stated importance. This is not just for new technology, but any time a new HCPCS code or modification is requested. While many people would argue that this type of data should be restricted to coverage determination processes, it is clearly important to CMS.

Jernigan: Those responsible for creating HCPCS codes need guidance and the latest information, including evidence-based data, individual cases, recent trends, fraud and abuse, as well as a full consideration of CMS’ role and limits. If it is determined through evidence-based data that a medical device indeed provides a medical necessity, then it becomes imperative that that device have an allowable. For instance, the standing-option seating system has many clinical values and has evidence-based data to back it up, yet there is no allowable. After a 2-year battle, it can be won and paid through an appeal, but why waste time and money on such an obvious necessity?

Johnson: The ultimate decision on new code applications is usually based on the clinical data submitted that support the medical benefit of the item. It is important to provide data that clearly show how the item is similar and different from other medical devices currently on the market, including costs and anticipated life cycle.

Pertelle: Do you believe that the Program Advisory and Oversight Committee (PAOC) will serve the role of quantifying the essential need for a comprehensive focus on the savings for Part A by investing the appropriate reimbursement for Part B? If so, what role do you feel it will play in facilitating collaboration among providers, manufacturers, physicians, and payors for strategic planning?
Bachenheimer: The role of the PAOC is to provide CMS with the best possible advice, data, and recommendations. I do not wholly agree with the assumption that there is little or no collaboration among all these entities. What the PAOC experience has shown, to date, is that all these entities—providers, manufacturers, physicians, payors, and, most important, consumers—share a common goal of ensuring that Medicare beneficiaries receive high-quality products and services under a competitive bidding structure. Whether CMS will incorporate any of the PAOC’s good ideas has yet to be seen.

Hostak: CMS views the PAOC committee’s role as identifying the best way to implement competitive bidding. This does not mean that CMS is not open to understanding why various technologies should be exempt from competitive bidding based on the financial impact on health care costs overall. However, the industry must gather the data that support this claim. Certainly, the PAOC committee is comprised of representation from the areas needed to launch this type of strategy. At the end of the day, collaboration at the highest level is needed to pull this off.

Jernigan: It is nothing new that Part A, the hospital insurance program that made up roughly 46% of benefits in 2004, and Part B, the supplementary medical insurance at 14% last year, have a communication problem. For example, a quadriplegic could receive a power wheelchair under Part B coverage using the gap-filling Medicare allowable based on old technology, and then be denied a certain seating system (even with recommendations using evidence-based data issued by the doctor, therapist, and provider) due to cost. Part B may end up saving $10,000. The consumer ends up with an out-of-date, inappropriate chair. An ulcer develops and requires surgery to repair the damage done by the power wheelchair. The beneficiary checks into the hospital, covered by Part A, and spends 40 times more (on surgery and recovery) than what it would have cost to simply get the appropriate wheelchair in the first case. The PAOC should convey these examples.

Johnson: Committee members have concerns with the Congressional Budget Office scoring estimates used to identify the savings that would be achieved through the DME competitive acquisition program. I would like to see updated scoring that takes into account the additional reductions that have occurred since passage of the MMA. While I do not believe the PAOC will focus on quantifying the savings in Medicare Part A through investing in the appropriate reimbursement in Part B, that is an exercise that has significant merit, and one the industry should pursue.

By reviewing updated savings estimates, the PAOC would be able to provide appropriate recommendations that would likely show little or no savings achieved through implementing the competitive acquisition program.

Pertelle: What is the state of the industry? How can we repackage our image as a necessary part of the care continuum?
Bachenheimer: Our “state of the industry” is one of constant changes and challenges, all while focusing on consumers. Since we are primarily funded by government, our industry will never escape this constant change. We must be flexible, responsive, and foresightful. We must shore up additional resources to be stronger politically, develop substantive evidence-based data, and work more closely with actual consumers.

Hostak: The industry is at a pivotal point. Reimbursement is declining, and products and services are being devalued. The industry continues to evolve based on reimbursement pressure rather than outcomes-driven or quality-driven measures. Until we change that mind-set, payors will continue to believe that opportunities remain to reduce reimbursement.

Jernigan: The nation’s largest health insurance program is in danger. A recent report released by the Medicare and Social Security trustees stated that the Medicare program will be broke by 2019. The President is now considering cutting further even more monies needed to match state Medicaid funding along with a Social Security change that could cut disability benefits affecting reimbursement. There is a bright side, however. Every 6 to 7 seconds in this country, someone turns 50 and 1.6 million a year turn 65. This means there will be demand and increasing pressure on the federal government to provide appropriate funding. Hopefully, the government will look to our industry as an answer rather than a necessary evil.

Johnson: The industry is in a good position to continue to bounce back in 2005 due in large part to industry efforts last year, which established a good foundation for this year’s efforts. AAHomecare and other industry leaders did an excellent job of developing the data necessary to mitigate the impact of transition to ASP for inhalation therapies and the FEHBP cuts for oxygen.

The rehabilitation industry also came a long way due to the unified efforts of all stakeholders including consumers, clinicians, suppliers, and manufacturers. While there is still a significant amount of work, we have positive momentum and senior relationships within CMS and other government agencies, which were almost nonexistent a year ago. These relationships have yielded a continued dialogue that ensures the industry will have a seat at the table when new polices are developed.