HME infrastructure crumbles

YARMOUTH, Maine - CMS set out to reduce the number of HME providers with competitive bidding and, as recent data shows, it has done just that, say providers.

AAHomecare released data recently that shows nearly 41% of providers across the country have dropped Medicare or closed their doors since July 1, 2013, when Round 2 of the program kicked off in 91 cities.

“This is what the program was designed to do,” said Ben Hertz, store manager of Elmora Pharmacy in Elizabeth, N.J. “It seems like a lot of stores in the suburbs and rural areas have closed down, not so much here in the city.”

New Jersey was the hardest hit, shrinking from 330 unique supplier companies in July 2013, to 114 currently, a decline of 65.5%.

Also topping the 60% mark were California (60.8%) and New York (60.1%).

“A lot of people have been acquired or are going out of business,” said Anthony Cecere, president of Homecare USA in West Babylon, N.Y., who has been in business nearly 21 years but hasn't drawn a salary the past three years. “I think we are going to see more fallout over the next six months to a year. People cannot continue to do business without reimbursement.”

Two hundred miles away, in Green Island, N.Y., outside of Albany, the number of providers has stayed relatively stable but the makeup of those providers has not, says provider Irene Magee.

“There are fewer independents—more of the locals were purchased by Lincare so that consolidated our area,” said Magee, vice president and director at Northeast Home Medical Equipment. “In our market, we've also seen the entry of a number of bid winners that have never serviced this area. There are true access issues here if a person with traditional Medicare wants to get (discharged) timely.”

Like Cecere, provider Doug Westerdahl believes there's more fallout to be had. He says he's concerned that the decrease in providers will only worsen as other payers adopt Medicare's rates.

“We've seen a significant drop in our profit margins and we've had to lay off 10 people since January,” said Westerdahl president of Rochester, N.Y.-based Monroe Wheelchair. “I've been saying for a while that I think we've crossed the tipping point and hopefully it won't get worse.”