Dealer/Provider: What do you say to providers who say they simply don’t have time to get involved in the political process?

Richard Bulich, RPh, president, Pharmaceutical Buyers Inc, Broomfield, Colo: Reimbursement and legislative changes generally take a lot of time and adjustment to accommodate for providers who are already time- and resource-strapped. It is tempting to do nothing and adopt a “wait and see” approach, but if providers want proposed legislation changed, the best time to address it is prior to it being implemented. If providers do not make their voices heard early in the process, they face a much tougher battle and have to adjust to the new regulations in addition to trying to get involved with the legislative process. Affecting change is much easier and has the potential for a more positive impact on a business prior to implementation.

Cindy Ciardo, CO, manager of vendor services, Essentially Women (EW), Oxford, Mich: I would ask if they are looking forward to a forced retirement. But the real answer is to make the time. In all seriousness, this is a pet peeve of mine. I do not have time either, but my company (family owned, independent, and celebrating its 50th anniversary this year) is very active in our state association, holding two board positions and chairing two committees. We sent a representative to Washington to meet with our Congressional representatives, and spearheaded a letter-writing campaign to them from all our employees.

We recently combined forces with two competitors, and invited both clients (respiratory and rehabilitation) and our Congressional representatives to visit our respective businesses. We gave them a tour, and educated them on the in-the-home CMS language and nationwide competitive bidding (NCB), and the impact both will have on our industry and Medicare beneficiaries. We then fervently asked for their support of the Hobson-Tanner bill and to sign the Dear Colleague letters objecting to the in-the-home language.

Many of Essentially Women’s members are small, independent businesses with a strong emphasis on service and quality care. Their livelihood is on the line like never before, and their concern is justified. EW has worked hard to update its membership regularly through its E-business communication network as new developments and information are released. The Web site holds information as well, including downloadable letters for beneficiaries asking for the exemption of post-breast surgery products from the bid, and another asking for Congressional support of the Hobson-Tanner bill. Time and space have been devoted to NCB in our newsletter and at our annual trade show. Getting involved in the political process is stressed over and over again with good response.

Bill Elliott, president and CEO, the MED Group, Lubbock, Tex: The reality of our industry is that everyone—owners, managers, and staff—needs to be involved in the political process in some way. With business revenue so closely tied to governmental agencies and funding, being involved in some manner is not an option, it is a requirement. However, this is a real challenge because everyone has so much to deal with in providing quality equipment and services to folks in their community. So the big question is how to best get involved, while at the same time running the business.

To help our members, MED is very active on the regulatory and legislative side. We look at this as a way to keep them informed and best represent their interests. We spend significant resources supporting the American Association for Homecare, the National Coalition for Assistive and Rehab Technology, the Restore Access to Mobility Partnership (RAMP), the American Association for Respiratory Care, the American College of Chest Physicians, and the National Association for Medical Direction of Respiratory Care. Another way providers can be active is by joining and supporting national and state associations as they work on their behalf. And everyone throughout the industry needs to be willing to contact their representatives directly via e-mail and phone when requested regarding important initiatives. Unfortunately, that’s a fact of life in the HME arena.

Ken Fasse, president, Northwood Inc, Center Line, Mich: First let me say that I can understand that response. It is difficult for businesspeople to break away from the day-to-day responsibilities of managing their operations and serving patients. Time is at a premium. and there are innumerable initiatives and good causes that compete for our time and resources. However, if you consider for a moment the impact that government has had on our industry and will continue to have in the future, you would surely reach the conclusion that the political process is worthy of investing some of your time and resources.

While we have some very qualified and dedicated individuals representing this industry in Washington, DC, it is not enough and it does not replace the value and impact of grassroots lobbying. If you are just getting started, go to www.congress.org and find out who your member of Congress or US Senator is. The American Association for Homecare is also an excellent resource, and their Web site offers guidance and tips on grassroots lobbying and also outlines today’s legislative priorities. You can link to their advocacy and government relations page via Northwood’s Web site: www.northwoodinc.com.

Take a few minutes and write a letter and/or contact your legislator. Let him or her know that you are paying attention to what is going on and voice your support for the industry’s legislative priorities. In addition, support groups in our industry such as Northwood are advocating on your behalf. It will be time well spent.

John Gallagher, director of government relations, Van G. Miller (VGM) Group, Waterloo, Iowa: Do providers want to risk the chance of totally disrupting their business? With NCB there is no “next time,” or “I will weather the storm.” This is all or nothing. If you do not get the contract under NCB and your business is 25% Medicare or greater, there is little chance you will survive. If you won’t get involved now, when will you?

D/P: Is 2005-2006 a “turning point” period for HME providers? If so, why?

Bulich: Whether 2005-2006 will be a turning point for HME providers really depends on the therapy and patient mix that a particular provider offers. Major legislative changes can often lead to identifying new business opportunities. We encourage members to regularly evaluate both their patient mix and therapies offered as well as focus marketing efforts to adjust that mix to make sure their business remains viable.

Ciardo: If a turning point is to be interpreted as a time when we as providers need to institute changes in the way we operate our businesses, then, yes, I think this is another turning point our industry faces. We have faced several in the past 10 years or so: the onslaught of managed care, the Balanced Budget Act, the scare of one-stop shops, Medicare cutbacks, and the threat of competitive bidding rapidly approaching in 2007—and all that follows in its wake—mergers, acquisitions, consolidations, small business closures, reductions in service, the quest for less expensive merchandise, and mandatory accreditation. Obviously, the impact of NCB will and already has altered the way we run our businesses.

Elliott: This will certainly be a critical time for all providers as we deal with a wide variety of issues. These range from the immediate—such as the FEHBP cuts, new Medicare regulations, and coding for mobility products—to the more long-term, national competitive bidding. During this time, substantive changes will be implemented and developed. That’s why it is important for providers to stay informed and active. MED is staying close to these changes and developing new programs to assist our members.

But change is nothing new to the industry, nor is it unique to the HME business. All industries face revenue and expense pressures. These times will require businesses to run smarter and more efficient, and that needs to be a theme for HME owners and managers.

Fasse: 2005-2006 is most definitely a turning point for HME providers. Especially for community-based independent providers that serve limited geographic areas. Many of these providers are Northwood network members. Sometime between now and then, CMS will determine how national competitive bidding will roll out. Depending on what form the bidding will take, some providers may go out of business or at a minimum lose significant market share. There may also be additional consolidation of the industry through acquisitions.

Will coordinated networks of providers be permitted to “bid?” Will the Hobson-Tanner bill get some traction and help small providers? Will the Program Advisory and Oversight Committee influence how NCB will ultimately be implemented or has this already been decided? What will happen with the inhalation drug dispensing fee? There are a lot of questions right now and not a whole lot of answers.

Perhaps there will be more information available by Medtrade 2005. It is the uncertainty of the future, along with the certainty that things will be different, that makes 2005-2006 a critical period for the HME industry.

Gallagher: This is a big turning point but not necessarily the turning point. 2007 will be the key year in the MMA. Successful efforts in the 109th Congress (HR 3559) by the HME industry can reduce the chance for further negative turning points in the future.

D/P: If HME providers lose their current legislative battles, can buying groups ease the pain?

Bulich: In an environment of changing reimbursement, using all available methods to reduce overhead is a necessity. Since buying groups are designed for the purpose of decreasing costs and providing tools to allow members to increase profits, they are a natural fit for providers trying to manage their overhead costs. It is important for the members of buying groups to work with their group and discuss compliance options as well as other ideas to reduce costs.

The negotiating position of a buying group is only as strong as the providers it represents; and compliance is a key issue. With a committed membership base, a buying group can show manufacturers a better demonstrated business value and is in a stronger position to gain better pricing for members.

Ciardo: Absolutely. If HME providers lose this battle, one of the only ways they can survive is by increasing their profit on the remaining business they have, and by growing their non-Medicare business. Buying groups can be instrumental in negotiating better prices and other buying incentives.

But it goes beyond that. Group purchasing organizations (GPOs) can serve as a powerful advocate, educating members on the impact that government and regulatory issues will have on the industry. EW routinely publishes articles and information, provides seminars, and disseminates information via their E-News network to help providers deal with the changes in our environment, to encourage active participation in the fight against unfair legislation, and to promote sound business practices. GPOs can provide education, information, and networking opportunities that may otherwise be beyond the reach of many independent providers.

Elliott: Definitely. Now, more than ever, an HME provider does not want to be out there alone. Providers must align themselves with an organization that will help them succeed in this changing market. A member-focused buying group is one of the keys to success in the future.

At MED we take this responsibility very seriously. We will be successful only if we continue to meet the needs of our members. Certainly lowering the cost of products is a key area of focus. However, other critical elements are the resources and tools that a group offers to help providers operate more efficiently. MED focuses on helping in key areas. These include peer networking, planning, management, staff recruitment and evaluation, training, reimbursement, and overall business operations. A buying group provides a venue for tapping into the collective power, experience, and wisdom of other successful providers.

Fasse: Unfortunately, losing today’s current battles for some could mean losing the war as well. There may be plenty of pain to go around. However, Northwood’s “pain relief” is multidimensional. We offer our members the opportunity to benefit from economies of scale through the Northwood Plus group purchasing program, and we also enable our providers to realize more referrals through our group benefit contracting division, which is Northwood’s core business. In addition, Northwood offers member support services including political advocacy and monitoring. Unlike some groups, North-wood is solely committed to the HME industry and to its member providers.

Gallagher: First, losing further legislative battles is not an option. Every day that the industry continues to fight at the grassroots level is another day that we gain ground. HR 3559 is an excellent example that we are gaining ground. However, HME providers can not be content to let others carry the water in this fight. To be successful, everyone must join the effort. Should there be a competitive bid, VGM can obviously help with pricing, but also by helping members with information, strategy, and working cooperatively in network configurations.