For the second in an occasional series called Washington Watch Round Table, we asked Cara C. Bachenheimer, JD, to act as guest moderator and facilitate a discussion about the legislative priorities of home care.

Bachenheimer: What should be our industry’s number one legislative priority?

Mary Benhardus, Program Advisory and Oversight Committee member, and president of Handi Medical Supply, St Paul, Minn: Our number one priority should center around competitive bidding and changing the rule that quality standards are not required to start the process.

The second should be to suspend implementation of competitive bidding until a new savings evaluation is completed. We need to see significant savings to be gained though competitive bidding. The evaluation may surprise our legislative body. The present cut will yield reduced bid savings, while bidding, administration, and implementation remain at the same if not higher rate as in the demonstration period.

Mark A. Chmielinski, RRT, vice president of clinical services for Home Care of Michigan, Allen Park, Mich: To move home care forward, we must consider the most pressing needs of patients and providers, as well as the avenues that will allow us to get there by communicating with Congress. We must preserve the integrity of home health benefits and create opportunities in the area of pay for performance. Convincing legislators that home care can serve as a key to solving America’s health care crisis is of utmost importance.

Lawrence Higby, CEO, Apria Healthcare Inc, Lake Forest, Calif: Our number one priority must be the prevention of any further Medicare/Medicaid cuts to all DME products and services, including the dispensing fee for inhalation therapies—while simultaneously increasing awareness of the nonequipment/drug costs associated with providing them to Medicare and Medicaid beneficiaries. In 2004-2005, the industry has taken some of the most dramatic reductions ever imposed on a health care segment in a 2-year period, all in the face of increased fuel, labor, utility, rent, insurance, external audit, and other overhead costs—as well as sharp increases in the cost of certain products and drugs.

Mike Pfister, president of The Scooter Store, New Braunfels, Tex: Now that coverage guidelines are close to being finalized, we must focus on ensuring that consistent, objective, and clear guidelines for documenting medical necessity are developed through the defined regulatory process. CMS must define specific requirements for data collection through established procedures outlined in the Paperwork Reduction Act. Ultimately, the documentation requirements related to medical necessity must be applied objectively and consistently by all DMERCs for all beneficiaries and suppliers.

Tim Pontius, RRT, chairman of the American Association for Homecare and president of Young Medical/Toledo IV Care, Ohio: Our top priority must be to prevent any further cuts to reimbursement. Period. There are a multitude of issues, but what this industry really needs is a time of relative stability. It is imperative that Congress and CMS monitor home care over the next 2 years to determine what changes will manifest as a result of the recent cuts in respiratory medications, oxygen, and FEHBP reductions. We must see what services might be compromised, and how access might change before we place additional stresses on the payment system.This does not even take into account the escalating regulatory issues we have with documentation and the transition from DMERCs to MACs.

Pricing on power wheelchairs is yet to be determined and we are facing the national rollout of competitive bidding. This needs to happen when the industry is stable or it is likely to be predestined for failure.

Cara C. Bachenheimer is vice
president of government relations
for Invacare Corp, Elyria, Ohio.

Bachenheimer: What must we do to ensure that our industry plays a larger role in providing health care?

Benhardus: The Baby Boomers have been making the largest social marks on society of any generation. They are a services-oriented group, and many worked in health care and thus invented home care. We as health care professionals need to identify and voice the health care services society values. We need to rally our society and legislative bodies to stipulate the same values. Health care providers today—especially DME—need quality standards in the working environment to meet and exceed expectations of Baby Boomers now entering senior ages.

Chmielinski: Medicare is the largest single source of financing for an industry that accounts for more than 14% of the nation’s GDP. Sadly, about 50% of the US health dollar is wasted on unnecessary clinical services, administration, excess prices for drugs and other items, and outright theft. It is important to know that the financial problems facing Medicare are due to corruption and not demographics. If our government is too corrupt to fix the problems, then it should at least allow seniors to buy into the superior systems like in other countries. Other wealthy nations cover all of their citizens and on average spend only one half as much per person as we do. They are far from perfect, but we can learn from them.

Medicare is a payment system built on traditional insurance, especially focusing on high cost and acute care events. With emphasis on chronic disease and with the compression of morbidity, the challenge is different. The elderly need a financing system—and a health care system—that helps them delay disability and deal effectively with their chronic diseases.

Higby: The industry must invest in third-party studies and reports that prove the financial benefits of home care, rather than relying on anecdotal data. By having objective data, we will thwart efforts to further reduce our reimbursement rates, and educate policymakers on the TOTAL cost of providing home care services safely and in a quality manner. In addition, the industry itself needs to take the lead in adopting quality financial performance and compliance (anti-fraud/abuse) standards to increase credibility on the Hill and with CMS.

Pfister: Home health care does produce better patient results and is more cost-effective. As an industry, we need to ensure that more clinical outcome studies are completed using actual Medicare/Medicaid data so that these benefits can be quantified. We need to persist in educating legislators and the administration regarding these health and financial benefits inherent in home health care. This will help change the existing mind-set that utilization increases have to mean that overutilization is occurring. For example, advances in technology related to power wheelchairs have resulted in increases in utilization. However, recent outcomes studies have shown total health care savings of more than double their costs.

Pontius: We should make the chronic obstructive pulmonary disease (COPD) Coalition as strong as possible by getting our Senators to sign on in support. A strong coalition can be of tremendous help in bringing our issues to the forefront. Home care is part of the solution to long-term cost control, but we must be at the table much earlier to discuss budgets and planning with other health care entities as we seek to control costs and demonstrate true disease state management.

Bachenheimer: As a relatively small part of the health care industry, what can we do to increase our influence and credibility with lawmakers?

Benhardus: Providers must look for ways to boost credibility with lawmakers. Legislators need to establish quality standards to better understand the value of the home care services they are funding.

Chmielinski: We can have greater provider accountability for the quality of home care services. State licensure requiring providers to adhere to specific ethical and operational standards will convince legislators and garner support for HME values and benefits. Licensure would also help establish credibility with payors and legislators.

Higby: Again, credible third-party studies will go a long way. Second, there is nothing like a branch or pharmacy tour with a lawmaker to open their eyes to the support services and regulatory requirements associated with caring for our patients. Everyone needs to pursue local contacts with legislators’ offices and participate in grassroots campaigns. Unfortunately, those campaigns are usually carried by a few providers when we need more broad-based involvement.

Pfister: First, we should continue to raise the bar when it comes to supplier standards related to accreditation and certification. As an industry, we need to be more active in self-regulation. Second, we need to combine the various coalitions and groups within our industry into one cohesive voice.

Pontius: I hate to sound like a broken record, but we could make a difference if 85% of the people working in home care just got involved. For too long, we have relied on a few companies to carry the fight to Capitol Hill. Congress needs to know this is an industry that has a passion about making a difference in peoples’ lives. We are starting to get members of Congress who truly believe in us, but we need support from every state at every level to get to the next level.

Congress is lobbied incessantly by other health care associations that have more resources. But I am certain that if we had 7,000 companies across the country that made the commitment to belong to our association, and be willing to invest a small portion of what they stand to lose in future cuts, we could make a huge difference in the influence we can exert inside the Beltway. Politics is not just about having a good story to tell. The more dollars we have available, the more resources we can leverage to get to key legislators to spend the time we need to educate them. Also, instead of 40 letters going to a legislator, imagine what kind of interest we could generate if that same legislator got 4,000 letters from constituents. We could make that happen with more support from the silent majority.

As to credibility, we continue to self-monitor our industry and report the suspicious activity. Historically, this industry has been on record as reporting most of the major fraud and abuse scandals months before they were exposed. Those acts have not been perpetuated by legitimate suppliers, and it should remain our goal to work with CMS and other health care professionals to establish higher supplier standards that make it difficult to repeat these past “schemes.”

Bachenheimer: How important are alliances with consumer and clinical organizations?

Benhardus: It is difficult to lean on clinical and hospital organizations for legislative objectives. They have their own objectives to work on. They are beneficial in that they can give us the feedback and outcomes data on home care service successes and lower reoccurring hospital stays. We must build home care for the Baby Boomer population, because as a nation we have not been building new hospital rooms.

Chmielinski: It is more important than ever that we align ourselves in areas where we find common ground. Other industries have used partnering for years to improve their business viability and profitability. Whether product or service focused, quality measurement and implementation require information to flow from the provider back through the vertical chain to the manufacturer. Manufacturers need providers to share their experience, and providers need benchmarking and best practices. Providers are closer to the customers. Because of this, other members of the supply chain are particularly eager to get their insights. Smart companies improve quality by partnering to get close to the customers.

As much as we idolize the “lone gun,” the reality is that no hero worth his spurs ever made a move without his trusty sidekick. Collaboration works.

Higby: Such alliances are critically important to providing a view of our industry from all constituents’ perspectives. Unfortunately, people with chronic lung diseases are not as well organized into formal groups as are patients with cancer, parents of children with cancer, and other patients with various disabilities. By involving patients and pulmonologists in creating awareness of our issues, the entire effort will be more well-rounded and credible.

Pfister: We share the same objective—helping consumers achieve a higher standard of living. Consumer and clinical organizations do not have a financial interest in our issues and therefore are viewed as more credible. When we work together in the best interest of our constituents and health care as a whole, legislators take our arguments more seriously.

Pontius: Alliances might be the only way this industry can avoid catastrophic changes. We have long attempted to raise the bar on the level of professionalism within our industry. The problem is that we are still “Suppliers” and not “Providers.” Too many outside the industry still view us as equipment jockeys. It is imperative we develop close alliances with consumer groups who can validate the rationale for many of the key services we provide (at no charge) in conjunction with the products they receive. From custom rehabilitation equipment, to home respiratory therapy, to enteral therapy and TPN, there are a veritable basketful of products and therapies that require complete compliance by the patient to be effective. That does not happen in most cases without great clinical expertise and support. Congress and CMS need to hear that from the consumers/beneficiaries themselves. Recent successes in developing clinical affiliations reinforce the need to have physicians, nurses, and other allied health professionals at the same table with us.

For too long, the home care supplier has been stuck in the virtual Bermuda Triangle between the doctor, the patient, and the payor. We are compelled to provide what the patient wants, required to provide what the doctor prescribes, and obliged to accept what the payor determines to be a reasonable fee. That must change!

Bachenheimer: What is your vision of the role of HME/home health care in the US health care system 20 years from now?

Benhardus: I believe Medicare and Medicaid will continue to be important payors. My hope is that they lead the way toward a focus on quality preventive health care. One of Medicare and Medicaid’s biggest problems today is the no-preventive-care approach.

Chmielinski: I view the health care system as three big power players—the managed care plans, the hospitals, and the physicians. Each one of these players, inevitably, must be willing to take the risk in building a point-of-care health information system to rival the worldwide network of electronic banking. Through health care information exchange and interoperability, clinicians will have access to a longitudinal medical record. Without some means of integration, fragmentation of the consumers’ health care experience will continue to escalate and result in errors, duplication, lack of coordination, and many other problems. Information technology could virtually tie together a network of providers so the fundamental operational, clinical, and financial synergies could be realized. Without this synergy, health information will remain in proprietary silos in which the health care enterprise hopes to gain a comparative advantage by imposing high costs on consumer switch-over and by exercising market leverage over small-niche players such as independent physicians, community hospitals, and home care providers.

Higby: Instead of representing 4% of the US health care dollar, home care should represent 10% minimum. Today, certain incentives prevent more home care services from being provided to people who are perfectly able to receive them (such as IV chemotherapy, which represents the majority of oncologists’ revenue, and thus they are reluctant to send more people home to receive the therapy).

In 20 years, we hope that all incentives will be more appropriately aligned and that technology and other advancements lead to increased utilization of home care. Government payors will continue to be important, but if the shift toward managed care Medicare and Medicaid programs continues, “pure” government reimbursement may represent a smaller portion of the overall home care market. Since these models deliver significant savings to the government, while assuring quality standards are met, we believe this is a move in the right direction.

Pfister: I believe we are facing a “longevity paradox.” Today, about 6,000 people enter the 65+ age group every day. Still, Baby Boomers do not even start turning 65 until 2011. Along with this phenomenal growth are the advancements in medicine that push life expectancy higher and higher. The paradox is that there will be a whole lot of us living longer but requiring more assistive technology. This will place tremendous pressure on our health care resources.

The good news is that aging Americans will continue to want to “age-in-place.” As hospital- and institution-based care costs continue to rise, technology will help extend more and more health care to the home. Clinical outcome studies will show huge costs savings for home-based care. As a result, government health systems will support home health to control spiraling costs.

Pontius: HME/home health needs to be a vital part of the health care continuum tomorrow and 20 years from tomorrow. Hospitals remain a factory for nosocomial infections, and we are much better served remaining in our own homes as as long as possible. I hope that monies remain available to allow companies to invest in telemedicine technologies because that is the most obvious solution to doing “more with less” and effectively monitoring patients.

There have to be dynamic changes for Medicare and Medicaid to survive, but I think they will survive. We need to realize that neither is an entitlement or God-given benefit. Congress and CMS need to give beneficiaries more credit for being able to make sound decisions about their own needs. Rather than trying to keep the Medicare benefit as “one size fits all,” it would seem we can have variable benefits based on economic factors. Allow beneficiaries to “choose” products based on personal preference, but knowing Medicare will pay only a certain flat rate for those products (assuming they meet medical necessity). We do this at the optometrist office and almost everyone gets what they want, and the plan pays no more than if they forced us all to wear black plastic frames!

Medicaid needs to move to a model that covers “necessity” items versus convenience. We cannot subsidize the entire state population for ALL things, so why not decide what is truly necessary and start limiting what the states HAVE to pay for? This is a political hot potato that will require courage to deal with, but it does not appear we have many other options.