Arnold Bennett once said, “Any change, even change for the better, is always accompanied by drawbacks and discomfort.” The power mobility device (PMD) industry has experienced significant change over the last 10 years. From a complete overhaul of the power mobility benefit, to national competitive bidding, from transitioning standard power to a 13-month rental, to the ongoing saga called “documentation,” suppliers have had to become more agile to navigate through these changes. It’s enough to ask why anyone would want to be in this industry.
A perfect storm has emerged in U.S. healthcare, as these sweeping reforms are dramatically altering market dynamics for suppliers. The total available healthcare market is poised for explosive growth as the population ages and insurance coverage is extended to more Americans. At the same time, new government healthcare policies and regulations are being enacted in an effort to control rapidly escalating national healthcare costs and spending.
But what does that mean for physicians who prescribe these products and services and most importantly, Medicare beneficiaries?
Physicians and their patients have come to expect a certain level of care over the last 10 years. Suppliers have taken pride in their ability to know and serve their customers’ needs.
Unfortunately, eroding supplier margins point towards a systematic consolidation of the industry and quite possibly, fewer product selections, creating serious concerns regarding future access and quality of care.
Let’s start with national competitive bidding (NCB). Earlier this year, CMS rolled out the initial round of the controversial program for durable medical equipment (DME). Despite the design flaws that preclude long-term sustainability, it appears that CMS intends to aggressively expand the program to an additional 91 cities with few if any changes. For physicians and beneficiaries alike, NCB creates a more fragmented delivery system because there will be fewer one-stop-shop contract winners. Physicians and beneficiaries accustomed to working with full-line suppliers for all their DME needs may be forced to manage multiple new referral relationships that can change with each program contracting period and offer widely varying service levels and quality controls. DME supplier existence can be heavily influenced by the success or failure of contract wins and pricing set in those contracts.
Next, suppliers who were fortunate enough to find the necessary financing in a tight credit market transitioned their power wheelchair business into a 13-month rental model. Not only does this mean billing and receiving 13 individual payments, but service is now bundled during the rental period. For suppliers who actually do provide service, this becomes a tighter strain on overall revenue. Medicare beneficiaries may find it convenient to see this as “free service,” but it may become increasingly difficult to find a willing service provider. Lastly, physicians are going to be impacted as companies exit the market. As a result, physicians may be forced to find new referral partners.
If that isn’t challenging enough, physicians and suppliers continue to struggle with PMD documentation issues. The growing trend from the Administration is to expect more, pay less. Physicians are asked to provide face-to-face examinations and deal with excessive PMD documentation burdens that are confusing and subjective. Meanwhile, their medical expertise is all too often second guessed when medically necessary PMD items are prescribed and then denied by CMS, leaving suppliers caught in the middle, wondering how to get paid and stay paid for products and services provided to beneficiaries. Beneficiaries suffer when their claims are denied, either limiting their access or when they attempt to get service on items that were denied. Ongoing CERT and OIG reports substantiate this documentation issue point. Sadly, CMS has failed to address the real problem — the lack of a clear and/or objective clinical standard that includes a multi-page form to help physicians navigate through the coverage criteria and documentation requirements in a uniform manner.
Moving forward, things will certainly get more even more interesting. The bulk of the provisions in the Patient Protection and Affordable Care Act (ACA) are yet to be rolled out, and we face the unknown impact of the new Congressional Super Committee as they endeavor to identify trillions of dollars in budget savings. Change is inevitable.
Mark Leita, an MM editorial advisory board member, is the VP of external relations & government aff airs at The SCOOTER Store.