Because there's no reimbursement

Sunday, March 31, 2002

Over the past few years, an otherwise innocuous phrase - inherent reasonableness - has become a bugaboo for the HME industry. The reason is clear. Most providers believe the DMERCs' power to adjust reimbursement levels by 15% annually will typically result in downward pricing pressure, and rarely, if ever, in adjustments that boost reimbursement on the Medicare fee schedule.

It doesn't have to be that way. Certainly, the Medicare fee schedule is rife with imbalance in both directions. For example, how much more service does a highly ambulatory home oxygen patient require, say, than a person to whom you've just delivered a walker? Lots.

And yet, the Medicare fee schedule is structured in such a way that makes no distinction between the service components that attend each product. We all know this. The gripe is old. And there's little reason to believe that Medicare, of its own initiative, will revamp the fee schedule to redress the inherent inequities.

That's why the proposal that MED Group CEO David Miller proposed at the AAHomecare leadership conference is so interesting. His nascent scheme for identifying the costs of providing product, service and a needs assessment and then distinguishing those costs on the fee schedule would go a long way toward taking the bug and the boo out of inherent reasonableness.

The proposal is budget neutral, meaning it wouldn't necessarily add more reimbursement to the Part B pot for HMEs, or take any out. But it would mean reapportioning reimbursement in a more fair way. You'd get paid for the work you do. And you wouldn't get paid for the work you don't. That's inherently reasonable.

As Miller made his pitch at the Leadership Conference, I was sitting next to a well-respected provider who muttered, "That'd kill me." Other very well-respected HME providers have also blanched at the prospect of "unbundling" the fee schedule.

After all is said and done, maybe it won't make sense to change the fee schedule. From my crow's nest, my hunch says it does make sense. For sure, the conversation is worth having.

The HME industry is already feeling the consequences of not having a service component built into the fee schedule. Think of all the new technology coming down the pike - in home monitoring and diagnostics, for example. The reason one home monitoring vendor exhibited once, and only once, at Medtrade is because they found little receptivity among HME providers for their system. Why. "Because there's no reimbursement."

Why aren't HME providers launching in-home sleep diagnostic programs? "Because there's no reimbursement."

As more sophisticated product comes down the pike, and more patients require more service to handle more equipment in home, how much longer can anyone afford to shy away from business because there's no reimbursement? HME