Let’s talk about rate relief. Everyone agrees that Medicare and other third-party party payers must recognize the huge costs increases that the HME industry has been forced to absorb during the pandemic, and which will persist after the PHE.

The HME industry is better known and has an improved reputation because of our response to the covid crisis, but unlike most other entities supplying health care services, we have little fixed cost and no ability to increase our charges to cover increases in variable costs, as our rates are fixed by the payers.

Medicare rates, on which most third-party payer rates are based, remain at levels set by an admittedly flawed bid system that contributed to the loss of more than 40% of HME locations is Alabama in the past ten years. We are presently asking our legislative delegation to support continuing the slight rate increases granted because of the PHE after the PHE ends—and that’s the message we ask you to convey now.

All we are asking for is to keep rates the same as they are now, with a 50/50 blended rate for rural and 75/25 blend for non-bid, non-rural. The blend is based on 2016 rates and average regional bid rates.

Industry leaders have agreed to look for the greatest possible increases we can get our Congressional champions to support and that can be sold to Congress. The lowest amount under consideration for bid areas is a 90/10 blend, effective as soon as possible, while an effort already underway continues to develop a sustainable bidding system that won’t risk wiping out more providers.

All affected national organizations and most local trade associations are doing a good job lobbying for agreed-upon goals. One of the weakest parts of this process is meaningful support from constituents. There is a great need, in my opinion, for a greater number in two groups—those who will regularly take part in making calls and sending emails in quickly in response to requests for such support for a named effort, and those who will make a consistent, concerted effort to get acquainted with members of Congress and key members of their staff and keep our issues on their minds regularly.

Neither group would need to lobby in the traditional sense. Others will define and explain the issues, keep members and staff apprised of current events affecting our issues, such as “Dear Colleague” letters and legislation, and do all or most of the talking at meetings. Given the huge, undeniable effect on our industry by all governments and rule-making, rate-setting regulatory bodies, such as CMS, it’s amazing how few are willing to budget and time or treasure in helping with these efforts.

There’s an article in the February HME News about people ordering oxygen concentrators without a prescription, thinking it might help them avoid COVID-19 , or some such silly notion. With all the misinformation flying around, not to mention the confusing stories that are factual, that’s no surprise. To the extend that some succeed in obtaining the equipment, providers are likely to be asked for help with supplies and maintenance on items they did not sell and for which they have no valid orders on file.

I’m reminded of the constant stream of complaints we’ve received over the years about local providers being asked to do such things as fit CPAP masks purchased on line. Getting rid of this kind of mail order/online sales was a major factor in causing Alabama providers to support creating licensure. It hasn’t worked very well, however, primarily because the Board can’t take action against an illegal seller unless an Alabama consumer files a complaint, and that has proven to be remarkably difficult to produce. Aside from the fear of retaliation of some unspecified type, people who think they are saving a buck just won’t complain about a lack of service.

In both situations, the best response is always to refuse to help with supplies or service, especially if the prospective customer doesn’t have a valid prescription. Tell them to ask for help where they bought the product! If they do have a prescription and wish to purchase supplies you regularly sell, or if they require something like a mask fitting, offering to sell them the product or service for a fair price, for cash of course. Since they almost certainly paid cash for the online order, they can’t object to paying you the same way. Until virtually every provider does this regularly the problem will continue to grow.

Rumor control:

We got a question recently from an associate member asking about a rumor one of his newer customers related. This provider was convinced that United Healthcare was involved in negotiations with a couple of national providers with the intent of entering a sole-source, nationwide contract for home oxygen service. The customer was panicky about what would happen after the pandemic when the demand for oxygen returned to “normal” levels, leaving him or her stuck with zillions in excess concentrator inventory. It ain’t gonna happen…

Now, we can’t say there are no such negotiations going on, only that several states prohibit such practices and our national organizations are doing their best to keep it from happening, not to mention the complaints that would be generated in rural areas, especially, where service is hard to get under any circumstances, much less from a low-bidder with no presence anywhere near the market.

We suggested trying to introduce that provider to the serenity prayer popular with many twelve-step programs. You know the one—it usually goes something like this: “God, grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

Many years ago, I had a good friend—Norman— who was an accountant, employed for may years by the Internal Revenue Service in collections. He had gone to work for this new-fangled sort of insurance company, formed as one of those organizations that were going to rescue the USA healthcare delivery system from bankruptcy or worse, called a health maintenance organization, an HMO. It was called United Healthcare, and Norma’s job was to visit hospitals in his territory and tell them how much United would pay them to care for their subscribers. He didn’t negotiate anything, he simply announced the number of covered lives in the hospital’s service area and tell the administration that they had two choices—take what United wanted to pay, or watch all those patients being admitted to some other hospital. He did the same thing with physicians and other providers, and the reason he got away with it was that United sold health “insurance” coverage to large groups at rates lower than any insurer licensed to do business in the state.

They captured all those insured lives by being the cheapest insurer of any kind in any market and stayed profitable by gouging all potential for profit out of the providers who cared for those patients. You can imagine the kind of care provided.

I don’t know about their other big profit contributor back then, as my friend didn’t have anything to do with claims processing, but in recent years, United management has admitted in all sorts of public forums that they also try very hard to avoid paying for anything at all, and if they have to pay, to delay it as long as possible. That may be good for management and investors, but it certainly isn’t good for healthcare providers and patients.

It was a long time ago that I first heard the expression “you get what you pay for,” and that is definitely true when buying insurance from United, more than any MCO.

Back in the eighties, I first met industry pioneer Shelly Prial when he and I attended a program where we were the only two people in a large crowd who disagree with a panel of speakers who insisted that in ten years or less, the only survivors in HME would be full-line national or very large regional companies. It wasn’t true then, it isn’t true now, and I am convinced that it never will be.