Diabetes providers deal with changing dynamics

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Monday, March 30, 2020

Medicare reimbursement in the diabetes market has constantly slid downward, thwarting even meager margins on diabetic products.

If HME providers have a future in the category, it may depend on their commitment to selling products for cash. As manufacturers point out, retail products relevant for diabetes patients can also pertain to patients for other therapies and services.

Diabetes-specific items have historically included orthotic shoes and inserts, compression hosiery, blood glucose monitors and skin creams—products that have strong retail potential. Medical ID jewelry and CBD products are more recent inventory additions that have reportedly shown great promise as cash-sale items.

“Medical ID jewelry is getting very popular,” said Bobby Kanter, CEO and co-founder of Milwaukee-based Anondyne. “Preventative products have generated a lot of interest. Therapeutic shoes, socks and slippers are geared to prevent foot complications that start from stepping on something.”

Another part of the changing dynamics in diabetes is how competitors can become partners. For instance, Kanter says the podiatry community has essentially left the therapeutic shoe business, but the foot doctors are still there as referral sources for HME providers.

“Podiatrists are the original providers for us in prescribing shoes, but they’ve largely gotten out of shoe sales because of the paperwork involved,” he said. “For those who understand the new marketplace, the diabetes category is wide open.”

Stephen O’Hare, president of Roswell, Ga.-based Pedors Shoes, echoes the assertion that stringent reimbursement and subsequent denials have caused an exodus from the Medicare shoe business, but points to other accommodative footwear as growth items within the program.

“There is now significant shoe demand for conditions like severe edema or lymphedema,” he said. “In the past, those patients were fitted by providers who had been fitting people with diabetes and being reimbursed under the Medicare Therapeutic Shoes for Persons with Diabetes (TSD) benefit. HME providers who offer accommodative footwear see the opportunity to help drive more new patients to their facilities, where they are likely to buy other associated products for their healthcare needs, such as compression hosiery.”

CBD exploding

While they may not be diabetes-specific, cannabidiol (CBD)-infused products have taken over shelves in all sorts of retailers, from pharmacies to pet supply shops. Derived from hemp but containing no THC, CBD is therapeutic but non-intoxicating, which makes it a popular over-the-counter remedy.

CBD products come in various forms, including oils, lotions, gel caps and “gummy” edibles. In fact, the product category has ballooned so large and so fast that it is difficult to keep up with it, said Jay Butler, director of extended care for Daytona Beach, Fla.-based IMCO.

“Google ‘CBD’ and 30,000 products come up,” he said. “And it is one of the few things Amazon does not carry.”

Providers interested in handling CBD items need to do their homework on the nature of the category and commit to educating consumers about product nuances—specifically the difference between CBD and its relative, marijuana, Butler said.

Making a bundle

Because of eroding Medicare reimbursement for conventional diabetes supplies, Butler and Janet Rice of Clarity Diagnostics teamed up to create a ready-for-retail bundle that HME providers can sell for an affordable price to their clients. They came up with the single-use Home Blood Glucose Monitoring Kit, which providers can buy for approximately $30 and sell for $59.99.

The kit offers a 60-day supply of all the appropriate supplies, including a glucose meter, carrying case, two 2032 batteries, 300 lancets and lancing device, 250 test strips and 300 alcohol swabs. The retail price is a fair amount for consumers, who have the most trouble affording the test strips, said Rice, vice president of marketing for Clarity and mother of a Type-1 diabetic son.

“Most people don’t know this, but there is a thriving black market for diabetic supplies,” she said. “One of the most concerning things about that is a question about whether they are expired or not.”

Currently available to IMCO members, the kit is designed to cover a patient testing up to four times a day for two months, keeping the cost to under $1 a day, Rice said.

The low cost does not mean “cheap” supplies, however.

“The quality and scope of the products in the kit is impressive,” Butler said.