2023 Virtual Washington Legislative Conference

TexMEP Executive Director, Lauryn Estrella, joined members and Texas HME providers and associates in sharing their passion for high-quality care and detailed the challenges they are facing in the current reimbursement and business environment to the House and Senate offices in the 2023 Virtual Washington Legislative Conference held on September 20, 2023. 

Below you will find a summary of topics on these calls and supporting documents.  If you have any questions, please reach out to TexMEP Executive Director, Lauryn Estrella, at lauryn@texmep.org.

General and Background Materials/Studies:

    Compared to the 2018 data, we have seen a 25% decrease in Texas Medicaid suppliers and continues to decrease.

    • 2018 – 488 suppliers
    • 2019 – 461 suppliers
    • 2020 – 469 suppliers
    • 2021 – 368 suppliers

    As of 2021: 197 counties (78% of the 254 counties) have no supplier location and 24 counties only have 1 supplier location.

    Despite DME spending remaining relatively stable, overall Medicare expenditures have increased significantly. Summary:

    1. Medicare Spending Trends:

      • Medicare spending has risen by over 266% from 2000 to 2021.
      • DME spending has grown at a rate of 73% of Medicare since 2020.
      • However, the proportion of Medicare spending allocated to DME has decreased from 1.85% in 2011 to 1.68% (equivalent to $12.4 billion) in 2021.
    2. Aging Population Challenges:

      • By 2040, the number of people aged 85 and above is projected to double to 14 million, and a quarter of the U.S. population will be 65+.
    3. Role of DME in Home-Based Care:

      • Durable medical equipment plays a vital role in providing care to millions of Medicare beneficiaries in their homes.
      • Home-based care is favored by patients, with over 75% of seniors expressing a preference for aging in place.
      • It is stated to be cost-effective, with the cost of one year of oxygen therapy being equivalent to one day's hospital stay.
      • Home-based care has been associated with better health outcomes, including a reduction in hospital admissions/readmissions and fewer visits to the emergency department.
    4. Post-Pandemic Perspective on Home Care:

      • The World Economic Forum suggests that post-pandemic, governments should reconsider home care as a safer, more affordable, and higher-quality option for aging seniors.
    • Value of DME - Partnering for Reduced Costs and Improved Outcomes
          • DME helps cut costs by keeping patients out of expensive care facilities. 
          • Suppliers ensure patient compliance with their treatment plans. They maintain regular communication with patients to guarantee comfort and proper use of the equipment, leading to improved adherence and better health outcomes.
          • Despite the rising Medicare population, the DME industry is shrinking. As of March 2023, approximately 66 million people are enrolled in Medicare, a 28% increase since 2013. However, the DME industry has been steadily declining, losing 37% of its market in the last decade and experiencing an 11% reduction in locations in just the past year.

        The Centers for Medicare & Medicaid Services (CMS) improved the DMEPOS Competitive Bidding Program (CBP) to address previous design flaws, but bid prices from Round 2021 didn't yield expected savings, prompting CMS to remove 13 DME product categories from the program. CMS hasn't indicated if a new round will occur or if there will be program revisions.

        In 2018, CMS paused the CBP due to unsustainable payment rates and access issues. During the redesign, flawed 2016 payment rates were maintained, which were significantly lower than unadjusted Medicare fee schedule rates.

        Congressional pressure led to important program improvements:

                • Clearing Price Methodology: SPA is now based on the maximum bid for the lead item by initial contract-offering suppliers.
                • Unadjusted Fee Schedule as Bid Ceiling: Bid limits are now based on the unadjusted 2015 fee schedule amounts.
                • Surety Bond Requirement: Bidders must obtain a surety bond, penalizing those who decline contracts at or above their submitted price.

        After CMS rebid the program for Round 2021, 13 out of 15 DME product categories were removed due to a lack of expected savings. CMS has not provided guidance on a new bidding round.

        Our Asks and Supporting Documents

        1.  Support H.R. 5555, The DMEPOS Relief Act, to address out-of-date DMEPOS Medicare payment rates. This would apply a 90/10 blended rate for suppliers in CB areas and continues the 75/25 blended rate in non CB areas until the end of 2024.

        The DMEPOS (Durable Medical Equipment Prosthetics, Orthotics, and Supplies) industry is facing supply chain issues and rising operational costs.  Current Medicare fee schedules, based on an outdated Competitive Bidding Program (CBP), do not account for increased care expenses. This jeopardizes patient access to care and the financial stability of the industry. Over 36% of traditional DME companies have either closed or stopped serving Medicare patients due to these payment cuts. Proposed legislation by Reps. Mariannette Miller-Meeks and Paul Tonko aims to establish a 90/10 blended rate for excluded DMEPOS categories, potentially resulting in an 8% payment increase. It also seeks to extend the 75/25 blended rate for non-CBA relief until the end of 2024. The industry urges Congress to support the DMEPOS Relief Act (HR 5555) to address outdated Medicare payment rates.

          • CBO Score – Financial impact is $40 M for one year of relief.
          • This would be the third time legislation has supported this rate relief sending a clear message to CMS that this needs to be addressed
          • This legislation also seeks a 90/10 blended rate for CBA areas. These areas have seen ZERO relief and are still going off of 2016 rates 
          • Without support, providers will see a more than 30% decrease in reimbursement.

        Documents:

        2.  Senate Bill: Support S. 1294, DMEPOS Relief Bill, which would continue the 75/25 blended rate in non CB areas until the end of 2024.
        3.  Support H.R. 5371. This would allow for upgrades for CRT titanium/carbon fiber wheelchairs in Medicare. Members of Congress should reach out to Rep. John Joyce/s office to support.

        There was policy introduced in 2016 by Durable Medical Equipment Medicare Administrative Contractors (DME MACs) that prevents suppliers from billing for upgrades to titanium wheelchairs. As a result, beneficiaries seeking titanium or carbon fiber wheelchairs have to pay for the entire wheelchair out of pocket, and suppliers can only file a non-assigned claim for partial reimbursement from Medicare. This has hindered access to these advanced wheelchairs.

        Representative John Joyce has introduced H.R. 5371, a bill that seeks to allow upgrades within a code for titanium and carbon fiber wheelchairs. AAHomecare strongly encourages members of Congress to co-sponsor this legislation.

        Before the 2016 policy change, beneficiaries could access upgraded DME features by paying the difference in cost between the standard and upgraded item under an assigned claim. However, the policy now forces upgrades to be billed under non-assigned claims, requiring beneficiaries to pay in full upfront.

        Current regulations permit beneficiaries to obtain upgraded DME within a single HCPCS code. Titanium and carbon fiber wheelchairs qualify for this but are currently not allowed as upgrades.

        Allowing upgrades within a code would benefit end-users by giving them the choice of a wheelchair that best suits their medical, functional, and lifestyle needs. Carbon fiber and titanium wheelchairs are stronger and lighter than standard aluminum wheelchairs, making them easier to transport and reducing strain on users. This change would also remove financial barriers for beneficiaries, as they would only need to cover the 20% co-pay and the cost of the upgrade, rather than paying for the entire wheelchair and upgrades upfront while waiting for reimbursement.

        Documents:

          PLATINUM MEMBERS

                               

          Texas Medical Equipment Providers Association

          PO Box 371140, El Paso, TX 79937-1140

          texmep.office@gmail.com

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