Blame It on MMA

You name it, home medical equipment providers are worried about it.

From reimbursement cuts to bad press. From claims processing and payment time to ASP+6. From stiff competition and fraudulent dealers to high gas prices. Not to mention competitive bidding and the Medicare Modernization Act (MMA). When the responses to HomeCare's annual Forecast Survey were tallied, in fact, home care companies had given us a two-page, single-spaced list of things they're concerned about for 2005 and beyond.

It's no big surprise that many of these issues are directly related to effects of the MMA.

The good news is that providers responded with an even longer list of the measures they are taking to meet — and master — the challenges they face.

And in spite of what for many is shaping up to be an uncertain New Year, the majority of the HMEs we surveyed (65 percent) told us they not only expect to survive 2005 but to grow their revenue over 2004 figures, on average by 5.6 percent. An additional 18 percent expect revenue to remain constant over the two-year period.

About the Survey

In September, HomeCare mailed survey questionnaires to 1,500 randomly selected domestic subscribers asking about their intended product purchases, their business operations, future plans and their thoughts on the state of the industry. Of 353 companies that returned completed surveys, the majority (68 percent) indicated their organization is a home medical equipment/service provider. The remaining participants said they work for a pharmacy/chain drugstore with HME or for a specialty home care company.

Respondents operate in a variety of locations and represent a wide range of company sizes. The largest group of respondents, 28 percent, said their companies are located in a small urban area, while another 25 percent said their operations are located in rural areas. Eleven percent of the respondents said they operate in one of the 10 largest U.S. cities (where competitive bidding will begin in 2007), and 15 percent said they are located in one of the country's 80 largest cities (where the bidding program will expand in 2009). Eight percent of the respondents said their operations are national.

While these companies operate a median one location, 44 of the companies participating said they have more than 50 branches. On average, respondents employ 38 people. Thirty-nine percent said they have 10 or fewer employees, though 24 percent said they employ 100 or more.