Seniors and members of the military who rely on home health equipment such as oxygen, hospital beds and walkers, may soon have no place to turn for those needed items. A change in the way the federal government reimburses companies for offering certain home medical supplies is forcing some providers, particularly in rural areas, out of business.
To make matters worse, a widely supported bipartisan bill that would fix the problem is being held hostage by a member of Congress who is unwilling to allow any legislation through his committee other than a personal pet project.
The issue began when the Centers for Medicare and Medicaid Services (CMS), the federal agency in charge of administering Medicare and Medicaid, issued a new competitive bidding process for home medical equipment and supplies. The new system was designed to set Medicare reimbursement rates for things like oxygen tanks, walkers, wheelchairs and other health items in large, densely populated urban centers.
Earlier this year, however, CMS applied the price caps developed for large metropolitan areas to rural communities.
As a result, some rural home medical equipment businesses reported federal reimbursement rates falling by as much as 60 percent on some items in a matter of months.
This decision particularly harmed rural home medical equipment providers since they often have little meat on the bone to begin with. Rural providers generally serve a wider geographic area, driving up fuel and delivery costs. These rural home medical supply companies also often lack the buying power to purchase the equipment from manufacturers and wholesalers at prices as low as many urban providers, leaving little opportunity for profit.
In some cases, rural providers are now losing money trying to serve customers.
“They’ve cut the reimbursements so low that you can’t afford to do it,’’ said Steve Gulick, the owner of a medical equipment business in Danville, Illinois. Gulick said he can’t make money providing medical items for patients insured by Medicare or TRICARE — a healthcare program for members of the U.S. armed forces and their families that applies Medicare reimbursement rates.
Gulick’s business, which had been in his family for 80 years and four generations, is closing next month because the money his company received from Medicare for supplying in-home patients with items such as hospital beds, wheelchairs, oxygen, C-Pap machines and walkers was cut by 48 percent. “We’re not big enough to survive that,” Gulick said.
Other home health equipment providers have tried to stay afloat by rejecting new Medicare and TRICARE patients.
The House and Senate passed separate bills intended to limit the reimbursement cuts and assess ways to reduce the harm the policy inflicts on rural patients. Congress is prepared to agree upon a final version of the legislation during the coming lame-duck session. But Washington lawmakers may never have a chance to vote on the policy thanks to procedural games being played by outgoing House Energy and Commerce Committee Chairman Fred Upton, R-Mich.
It appears that Upton does not want the committee to consider the bill to fix the Medicare reimbursement rate for fear it will take focus away from his 21st Century Cures legislation. Upton’s 21st Century Cures legislation proposes $18.75 billion in new funding for clinical research through the FDA and the National Institutes of Health.
It appears that Upton has put his biggest campaign donors over the needs of rural seniors and America’s military heroes.
The Michigan lawmakers received more money from the pharmaceutical industry in 2013-14 than any other member of the House of Representatives. And his 21st Century Cures bill, which pours billions into drug research and speeds up the FDA’s drug approval process, appears to be little more than a thinly veiled gift to drug companies.
Rather than spending his final weeks chairing the House Energy and Commerce Committee showering top political donors with tax dollars and preferential treatment, Upton should focus his attention on doing what’s best for Americans. Upton should put the bill to fix the rural reimbursement rates for home health items front and center so all of America’s seniors and military families have access to the health care equipment they deserve.