Dealer/Provider readers can find an additional seven questions/answers from this panel on the Dealer/Provider Web site at www.hhcdealer.com.

Q#1: Dealer/Provider: As January 1, 2007, looms, all eyes fall on HR 3559 (the Hobson-Tanner bill that would eliminate some onerous provisions of competitive bidding aka selective contracting). What are you doing to make HR 3559 a reality?

Robert Achermann, executive director and legislative advocate for the California Association of Medical Product Suppliers (CAMPS), replies: We have been participating in American Association for Homecare (AAHomecare) conference calls and letter-writing efforts to encourage our members to make contacts with their representatives in Congress to garner additional coauthors for HR 3559. We use our various communication tools to keep the issue on the radar screen of our membership.

Karyn Estrella, executive director of the New England Medical Equipment Dealers Association (NEMED) and chairperson of the AAHomecare State Leaders Council, responds: NEMED’s Government Relations Committee, chaired by Wayne Grau of Pride Mobility, began working on signatures as soon as the bill was introduced in July 2005. As of March 7, 16 of the 22 congressional representatives in New England have signed on. Several others either have committed to sign or have indicated that they are inclined to sign. We continue to follow up with staff members in their DC offices and are working with state associations across the country. One of the first things we did was develop a scorecard so we could measure our progress. The scorecard shows how many of the 435 congressional representatives across the country have been contacted, whether they support the bill, and how many have actually signed on. To date, 183 representatives have been contacted and 83 have signed on. The Council has done a great job sharing strategies and successes. We are all learning from each other. I anticipate that this sharing of information will continue as we move forward. The stronger we are on the grassroots level, the more successful we will be on this effort and future legislative efforts.

John Gallagher, vice president of government relations, Van G. Miller (VGM) Group, responds: VGM and Last Chance For Patient Choice (LCPC on the Web at www.lastchanceforpatients.org) are working with state leaders/state associations to activate a grassroots effort. We are working with providers to develop “Congressional Trees” where providers are identified in each congressional district and team leaders are assigned.

Our goal is to have these congressional teams calling their local congressman’s district office and setting up meetings in the next 30 to 60 days. The purpose of the meetings is to discuss HR 3559 and the negative impact of national competitive bidding on Medicare beneficiaries and independent providers.

AAHomecare Chairman Tom Ryan responds: Let’s keep an eye on both the legislative and regulatory issues for this issue. First, the Hobson-Tanner bill continues to be a big priority for AAHomecare and the HME sector. We have been pleased with the way AAHomecare, the state associations, and various individuals around the country have been collaborating to increase the number of cosponsors, which has been growing each week. Wayne Grau at Pride Mobility deserves special praise for his great work. I know AAHomecare staff members have been on the Hill meeting about Hobson-Tanner. Personally, as a member of the New York Medical Equipment Providers (NYMEP), I participated in a very thorough Washington fly-in on Hobson-Tanner with other NYMEP members late last year. We met with virtually the entire New York delegation in Congress, and the results have been spectacular if you look at the number of cosponsors from New York alone.

On the regulatory side, the notice of proposed rulemaking (NPRM) has been late getting out. It was still weeks away as of early March. So implementation will probably not be January 1, 2007. We need to make sure that any implementation is done right, and we will press CMS to make sure that all the concerns expressed by the home care sector are taken into account with respect to issues that emerge from the NPRM, the proposed quality standards, and many other issues.

Q#2: What can providers do today to increase the chances of HR 3559 passing?

Achermann: Providers continue to hear the same mantra, but it is the only way to expand the potential for success. Providers need to make contact with their elected officeholders at both the state and federal level and let them know what they do and how important it is in managing health care costs. The bad press needs to be balanced by the true story of home care—to help us move beyond our status as a target for cuts.

Estrella: First, providers should be working with their state associations and/or AAHomecare. All associations have the position papers and talking points needed to educate providers and legislators. They should call the legislator’s local office to schedule a meeting with the congressman and/or their health legislative aide (HLA). Do not think that you have to sit down with the congressman himself. Although it is great when you can do that, it is equally, if not more, important to get meetings with HLAs. It is their job to stay on top of Medicare issues for the congressmen.

Or you could schedule a conference call with their DC office. If you can get the representative to meet at your company for a site visit, even better. Site visits are a great way to develop a long-term relationship with your representative. The important thing to do is simply ACT! It really does not take a lot of time or effort.

Some providers have told me that they were a bit intimidated to meet with their congressmen. Don’t be! Remember—they are our elected representatives. They need to understand our industry and our issues, and, most important, how their constituents are affected.

Gallagher: Get involved with their state associations and join the “Congressional Trees.” Grab their competitors and set up meetings with their members of Congress. This is really an education and long-term relationship issue. We must educate the members of Congress on “what” providers do on a day-to-day basis for beneficiaries and how they are a part of the SOLUTION to keeping health care costs down. We also must ensure that we develop long-term relationships with members of Congress to ensure these hits do not continue to be directed at DME.

Ryan: There has to be grassroots pressure. This particular fight cannot be won with only an inside-the-Beltway effort. Congressional offices absolutely must hear from every district. Each member of Congress must be educated and urged to cosponsor. Cosponsors should be thanked. This is lobbying 101. Establish a relationship with your members of Congress. Tell them your story. Let them know what is at stake here. Go to fund-raisers. On its Web site, AAHomecare has talking points for Hobson-Tanner and tips for grassroots lobbying. Use them. Call up AAHomecare. Get involved with your national and state associations.

Q#3: How do you predict capped oxygen rental will impact HME providers in the long term? What should providers do now (if anything) to prepare for this eventuality?

Achermann: There are more details to be worked out, but the framework for this change is a reality and providers can’t ignore the practical impact on their companies. I’m not a clinician, but the economics of respiratory therapy has changed over the last decade with the price of concentrators declining. Government payors, specifically CMS, have been driving down the monthly expense of caring for O2 patients by lowering the MPA and new tactics such as the capped rental extension. Providers must prepare for ongoing changes and look for ways to continue to ensure quality of care, but also scrutinize their expenses and service costs.

Estrella: The impact will vary depending on how many clients an individual provider has on service after 36 months. In speaking with some of our members, that percentage falls anywhere from 13% to 30%.

NEMED recently met with Rep Nancy Johnson (R-Conn), chairwoman of the Ways and Means Subcommittee on Health, to discuss our concerns with the oxygen equipment cap. She advised providers not to panic. “There is lots of time to think about this. We will get down to the fact of whether this will work or not.” I am hopeful that the industry will either succeed in helping pass legislation that will remove the cap or work with CMS on a maintenance and service structure that will work.

Gallagher: People are focused on the oxygen cap at 36 months. While that impact will be huge, we forget that with national competitive bidding in full swing come 2009, there will be a lot of providers that won’t need to worry about an oxygen cap. That is why we as an industry must focus on HR 3559 and getting a companion bill started in the Senate. The companion bill could be the vehicle to include “no oxygen cap” language. The chances of a stand-alone bill to remove the oxygen cap is nonexistent. Let us focus on what we can achieve now!

Ryan: This is a troubling issue because it represents bad health care policy. It assumes that the Medicare home oxygen benefit is only about a piece of equipment.

Q#4:Will you lobby for any type of “maintenance provision” to the capped oxygen legislation?

Achermann: CAMPS, along with other state associations, will continue to cooperate and assist with AAHomecare’s efforts to ensure a workable maintenance provision for this policy. We will probably also deal with the impact on the state level in our own Medicaid program, which closely tracks the changes made in the Medicare program. We have had extensive conversations with our Medicaid program about the need to make changes on how they reimburse for portability. We have emphasized the maintenance and 24/7 responsibility for respiratory equipment.

Estrella: The industry should devote its time over the next year educating Congress about all the services involved with home oxygen therapy, with the ultimate goal of drafting legislation that would rescind the oxygen cap. There are many Congressional representatives across the country that have expressed concerns about capping oxygen equipment and have indicated that they would be interested in supporting a fix.

The information gathered by AAHomecare (Morrison Study) may show that it is more cost effective for Medicare to pay the monthly rental fee than to create a new maintenance structure. This data is very important—because we need to take real numbers to Congress and CMS.

Gallagher: Of course. Herb Kohn (CMS) has come out in a recent Wall Street Journal article stating that the capped oxygen provision of the DRA will be a “seamless” transition for the beneficiary. We are also hearing from members of Congress that there is a maintenance and service provision in the DRA (fed to them by the Ways & Means Committee staff). We know this to be a blatant lie, but the member of Congress does not. Our answer has been and needs to be “show us.” What will that maintenance and service provision look like and how will the provider be reimbursed? They cannot do it for free.

Ryan: We will certainly do every thing we can to ensure that all of the services that accompany home oxygen therapy are recognized and covered by Medicare. In the conversations underway among oxygen stakeholders, we hope to develop a clear picture of what that might look like.

Q#5: What concerns you most about upcoming accreditation standards from CMS?

Achermann: The provider community is still waiting for indications of who will be recognized accreditation providers. We have provided seminars for our members both in California and at Medtrade about the options that may exist and the need to investigate and prepare to meet this eventual mandate. I am concerned that too many providers are waiting for all the details to be finalized before they begin that process. As is often the case with government mandates and policy development there can be a long period of gestation, but when they move, it is with a relatively short period for compliance. Providers need to be dealing with this now.

Estrella: My main concern is that the standards will be manageable for small providers. 86% of NEMED’s membership is small businesses as defined by the Small Business Administration ($6 million or less). The cost to become accredited and establish and maintain a compliance program will be burdensome for small providers.

The proposed standards require providers to follow generally accepted accounting principles (GAAP). Small providers are likely to operate on a cash basis which accounts for income received and expenses paid. Most small providers do not have sophisticated systems to produce the reports being requested. In our comments to CMS, NEMED requested that this requirement be removed.

I am also concerned about the timeline for implementation. 2007 is fast-approaching and we are still awaiting the standards. With everything else CMS has on its plate right now, I hope that they will move forward cautiously before implementing competitive bidding.

Gallagher: What concerns me most is the delay in releasing the standards and in identifying the accreditation agencies. How much time will be provided to the provider to meet the accreditation standards? Will they delay the implementation of NCB in the first 10 MSAs to allow ample time for providers to get accreditation, or will they push to implement NCB in Jan/Feb 2007? Accreditation will not eliminate fraud, but if implemented in a hasty and unreasonable fashion, it will eliminate the independent provider.

Ryan: There are a number of questions and concerns about the magnitude of the accreditation process that would be required. We may have a better sense of exactly what the challenge is after the NPRM is released.

 

 

Q#6: What was your initial reaction to the 216-214 house passage of the Recent budget reconciliation bill? Does the closeness of the vote give you hope or make you mad?

Achermann: This is a major source of frustration for providers since it was close and certainly represents an absence of consensus on proper adoption of policy. Medicare budget legislation is often a last-minute collection of changes and agreements that do not achieve much public scrutiny or opportunity for meaningful public input and discourse. Providers worked hard to alter the impact from last year but it was obvious that this package was important for the Administration and transcended any consideration of the impact on home care providers. We have to continue to fight and look for opportunities to improve the impact.

Estrella: I was somewhat disappointed but not entirely surprised. We knew it was going to be a long shot to defeat this bill. However, it gives me hope that our lobbying efforts in January made a difference. There were a few representatives who changed their vote to “no,” including Rep Rob Simmons of Conn. I think that pressure from industry groups, like NEMED, as well as heightened beneficiary involvement had an impact.

Gallagher: Both anger and hope, with a touch of frustration. The industry did a great job of mobilizing and rallying on this issue. There was success in turning several votes due to provider/beneficiary involvement. The Anger comes in at how close the vote was. Just one more vote in either the Senate or the House would have defeated the bill. The hope comes in that providers are now starting to understand that they have got to get involved and get their beneficiaries involved. The frustration is that—had we had this kind of involvement in 2002-2003, we might not be facing selective contracting in 2007.

Ryan: The Deficit Reduction Act covered a huge range of budget issues so it was not a vote about homecare issues alone by any stretch. But it was a disappointment to lose on a close vote since it contained several provisions that hurt homecare. We do know that without intervention by the Ohio’s Congressional delegation working with Invacare, the oxygen provision could have been much worse – capped at 18 months instead of 36. The challenges we face as an industry are huge. And they are not going away. Each of us has to hunker down and dig in for a long battle and we can’t let a defeat take the wind out of our efforts.

Q#7: Do you think manufacturers will see competitive bidding as an opportunity to provide equipment directly to consumers?

Achermann: This is an issue that continues to be discussed and is an obvious concern for the provider community. I believe that the provider network is an integral part of the service component and distribution system for dme and disposable supplies. The documentation requirements for medical necessity, complexity of billing, authorization and patient management are increasing and the role of the dealer provider will not diminish. The partnership between manufacturers and providers is essential to navigating the health care delivery system.

Estrella: I think there has always been concern that manufacturers would go direct to the consumer. Of course, both providers and manufacturers are going to be analyzing and modifying their business practices. However, new regulations and mandatory accreditation may make it unacceptable to go direct. Without the strong provider network that currently exists, attempts to go direct may backfire.

Gallagher: I think some will take this short-sighted view. I think others are smarter than that and will look to long-term growth and not short term gain at the expense of the current providers. Providers have long memories.

Q#8: Is it worth it to expend the time and energy to strengthen alliances with consumer and clinical organizations?

Achermann: I believe that this is essential in our ongoing skirmishes with public and private payors. Patients will be the strongest advocates for protecting their rights and the ability of providers to dispense products and services in the most appropriate and effective manner. Patients and quality of care are the major focus for policy makers. Complaints about financial impact of policy changes from providers do not receive the same level of response as those received form patient and consumer groups. Getting these groups to focus on your issues among the myriad they face is the difficult part.

Estrella: Absolutely. The capped oxygen issue is a good example. I think the industry did a great job getting the word out to interested parties and they responded. We were hearing that the oxygen cap was one of the hottest issues on the Hill. We needed to create a groundswell of support and we did it. These organizations typically have a network already in place. We need to continue to tap into these resources going forward.

Gallagher: The time is long past for building these alliances. Not just the HME Industry, but the health care industry as a whole must come together. The DRA had language in it that begins NCB on Labs. Does anyone truly believe that hospitals and doctors are not next? Alliances are like herding cats—hard to do but worth the effort. At VGM/LCPC, we are working to build these alliances with manufacturers/vendors/providers/advocacy groups. In fact, we see a great relationship that can be forged with the independent pharmacist on the issue of NCB. There is strength in numbers.

Ryan: Yes, of course. AAHomecare and others joined together during the budget battle over the oxygen. There are many natural allies that home care providers and state associations should be working with. For instance, state and local chapters of the AARP must be educated about the importance of home care. Home care should be part of their state and federal advocacy efforts. The American Lung Association is another natural ally. Because Hobson-Tanner addresses small business issues, the state chapters of the National Federation of Independent Businesses is another ally that could help us. AAHomecare is working with a wide variety of stakeholders on a long-term solution to oxygen reimbursement. The association also partners with many other groups in specific areas such as home health and rehab.

Q#9: Some experts predict that there could be 30% to 60% fewer providers in business if competitive bidding continues on in its present form. Do You agree with these numbers?

Achermann: I don't have a good basis for judging those numbers, but I do believe that the combination of competitive bidding and accreditation will reduce the number of providers. Part of that is driven by new formidable barriers to entry of new providers based upon these major changes. It may also impact the ability of some limited service/products providers to function in this new environment. I will leave those assessments to those that track the industry from the economic perspective.

Gallagher: Unfortunately that is the only conclusion one can come to if selective contracting comes to fruition in its present form. Selective Contracting is all about the elimination of competition / provider numbers, and nothing to do with fostering competition.

Ryan: The effects of NCB would be profound, no doubt. Until we find out exactly what is in the final rule, and whether we can get any modifications passed in Congress, it is hard to estimate exactly what the effect would be.

Q#10: What gives you optimism for the future of the industry?

Achermann: It is clear that home care and the providers that make up the array of products and services will continue to grow in importance in the health care delivery system. The aging of the population, longevity, and advances in technology that enhance the quality of life will preserve the role of the industry and individual providers. Advances in the technology of the equipment will necessitate greater involvement by providers and their staff and the complexity of their tasks and responsibilities. The continuing development of chronic disease management will further integrate home care with physicians and the other components of health care delivery and patient management.

Estrella: I am optimistic for two reasons. First, people prefer to be cared for in their homes rather than hospitals and institutions. Second, home care is the most cost effective delivery system. The industry must continue to educate its elected officials on the value we bring to the health care system. We are not equipment jockeys! We don't just drop off oxygen concentrators at the door like the pizza delivery guy. We are a service-driven industry. I may be overly optimistic, but I believe that one day Congress will recognize that we are the “best bang for the buck.”

Gallagher: With the announcement of Bill Thomas’ retirement, how can you not be a bit more optimistic? His has been a vendetta against this industry for over 6 years. Having said that, one must remember that he will still be there for over 9 months to do damage to a critical sector of health care. What gives me the most optimism is seeing the new faces and involvement of new providers and manufactures who have now joined in on this fight. For too long it has been the same people leading the charge. A great example of someone picking up the torch and leading in a fantastic way is Pride Mobility. Pride assigned Wayne Grau to the task of going out and promoting HR 3559 and getting cosponsorships. He has taken that challenge, and has done a great job traveling across the country getting cosponsors. Positive energy like this has a way of being infectious. In early March, 60 members of the Republican caucus in the House sent a letter to Budget Chairman Jim Nussle (R-Iowa) and indicated their support for no new cuts to Medicare/Medicaid in the 2007 budget. That is powerful and has a lot to do with the effort put forth by this industry prior to the DRA vote. We must keep that momentum going with the beneficiaries. At VGM and Last Chance for Patient Choice, we intend to do just that.

Ryan: This battle over the Deficit Reduction Act was a powerful display of concern from providers, beneficiarie, and from both the HME and home health sectors. There is a lot more untapped potential among providers, beneficiaries, and their families who understand how important home care is. We are never giving up. We owe it to these patients and their families, we owe it to ourselves, and honestly, we owe it to the American taxpayer to stand up for the most cost-effective form of care in America—home care. DP