Medicare bidding will threaten access to quality home care services
From: Zanesville Time-Recorder
I have more than 30 years experience as a respiratory therapist and as a manager of a durable medical equipment companies specializing in oxygen and respiratory therapy services in the Zanesville area.
A recent USA Today editorial about Medicare bidding competition painted a grossly unfair picture of our industry.
When I started working in home oxygen the equipment was very cumbersome, required considerably more service and was more costly than today. Also the market dictated that in order to get referrals from physicians the customers needed follow ups by a respiratory therapist. Even with all this, respiratory therapist proved that care for these patients at home and saved everyone untold amounts of money by saving hospital admission and readmission. This fact is still present today and cannot be effectively disputed.
As the years went by the equipment has become more dependable. A respiratory therapist is used more as a consultant now. We have learned to be more efficient as reimbursement for our service has dropped steadily over the years. The editorial quotes $177 per month. That is about 50 percent of what it was when I started. The industry has evolved over the years, but even at a 50 percent lower reimbursement we are still saving the Medicare program millions of dollars by taking care of patients at home.
The editorial talks about cost per month but does not examine what this all covers. Cost of equipment is one. Another is providing back-up service during power failures and equipment failures. This requires us to have staff on call 24/7 plus back up oxygen cylinders in the home. These cylinders are not reimbursed. During the aftermath of the massive wind storm in June our staff worked round-the-clock for a solid week supplying customers without power oxygen so that they did not have to go to a hospital. This service was not reimbursable and we estimated the cost to be in excess of $25,000. Additionally we paid the same fee whether a patient uses two portable oxygen tanks a month or 20, and there is no reimbursement for delivery. We also provide oxygen service, not just equipment, that encapsulates a lot of hidden costs.
We all encounter several behind-the-scenes costs, such as those associated with Medicare compliance, surety bonds, and accreditation. We must be licensed and/or registered with, and therefore subject to inspections, by Ohio State Board of Pharmacy, Department of Transportation and the FDA. All of this takes hundreds of man hours per year.
The editorial also accuses the industry of gaming the system. In my 30 plus years in this industry we have always stood against any fraudulent practice and have always prided ourselves in playing by the rules. It would be very dif?cult to game the system for home oxygen. In order for a patient to qualify for oxygen coverage they have to have passed several requirements, which are too numerous to mention here. We work with physicians’ offices to ensure these requirements are met. If any one of these is not correct, the claim will be denied by Medicare.
We work every day at cost containment and efficiency, while still providing a quality product for our customers, but a competitive bid price for oxygen of $88 per month for anyone is not sustainable. This is nearly a 50 percent reduction, and there’s not a 50 percent pro?t margin in this industry. The profit margin has not been above single digits for several years. There is no fat left to trim without cutting services.
I believe that home-care services of any kind are the most cost effective way of providing care, and when we’re talking about home oxygen services, we are talking about $6 per day in cost to Medicare. Compare that to the thousands of dollars it costs for a few hours in the emergency room.
Competitive bidding is a very poorly designed auction program that produces unrealistic and unsustainable pricing for home medical equipment. If left unchanged it will destroy our industry and threaten access to quality home care services in Zanesville and across the country.
Dave Kreis is the branch manager of Med-Ox Home Medical in Zanesville.