Industry survey issues warning 

ARLINGTON, Va. – The now expired 75/25 blended Medicare reimbursement rates served as a lifeline for many HME companies in non-bid, non-rural areas and immediate intervention is needed to preserve this infrastructure that allows individuals to manage their medical needs at home, according to a new report from AAHomecare. 

The report is based on a recent survey that found an overwhelming 93.5% of respondents have had to make difficult operational changes in response to the expired rates to keep their doors open. Of those: 

• 65.4% have had to reduce the amounts and/or types of products they offer Medicare beneficiaries 
• 53.3% have had to reduce staff 
• 45.8% have had to reduce their service area 
• 16.8% have had to or will have to close locations 
• 16.8% have had to stop serving Medicare beneficiaries for at least some products 
• 15% have had to stop providing HME and/or services to local facilities 
• 12.1% have had to reduce services to Medicare beneficiaries 
• 12.1% have had to stop or are considering stopping taking assignment 
• 12.1% are actively considering or will have to close entirely 

“After six months of living with significant reimbursement cuts, many home medical equipment suppliers are nearing a breaking point,” said Tom Ryan, president & CEO of AAHomecare. “Lower reimbursements even as operational and product costs continue to rise are leading many to limit their offerings, reduce service areas, lay off staff, close locations, or even consider going out of business altogether. Those decisions are difficult for suppliers to make because they know the effects they will have on seniors and people with disabilities or chronic conditions who depend on HME every day.” 

The survey, conducted in July 2024, gathered insights from more than 100 HME providers across non-bid, non-rural areas. 

Also among the survey’s findings: 86% of respondents say the expired rates have triggered rate reductions in reimbursement rates of other payers. Seventy-nine percent of respondents report cuts for Medicare Advantage plans, 51% for commercial payers, and 34% for Medicaid programs. 

AAHomecare says the findings underscore the urgent need for policymakers to restore the relief first provided by Congress for HME suppliers in non-bid/non-rural areas in 2020.  The association urges Congress and CMS to act this year to prevent further damage. 

The 75/25 blended reimbursement rates expired on Jan. 1, 2024. 

To access the report and brief, go here. 

• Hear about the industry’s latest efforts to get reimbursement relief passed in Congress