Respiratory Issues

It is no wonder providers of home respiratory care are having trouble catching their breath: the uncertainty of competitive bidding, ramifications of the Deficit Reduction Act, skyrocketing delivery costs. No matter how any of these factors turns out, it is obvious this segment of the HME industry is facing monumental change — and providers must figure out how to deal with it.

NCB'S IMPACT

Whether you call it selective contracting, competitive acquisition or national competitive bidding, the result is the same. The Medicare DMEPOS bidding program will have a significant effect on home respiratory care providers.

“Competitive bidding is changing the fabric of our industry as we speak. Companies are wrestling with how to continue to provide good patient care with a staggering reduction in reimbursement,” says Patrick Clevidence, vice president of respiratory services for Cleveland-based Medical Service Company.

“We were fortunate to have won contracts in each category in which we bid. Unfortunately, with the reduction in reimbursement there is greater pressure to reduce expenses,” he adds. “Companies are going to have to invest in better delivery models and processes to increase productivity and keep costs to a minimum. If they do not, they will be out of business.”

Clevidence and others say the effect on patients also will be significant.

“Sadly, the biggest loser in all of this is the patient. Some companies are reducing their clinical services and staff, and others will provide equipment that is not focused on the patient's needs but on what they feel they can afford,” he says. “We have committed to provide the same clinical support and the best non-delivery oxygen models that will benefit our company and, most importantly, the patient.”

Adds Joe Lewarski, vice president of Elyria, Ohio-based Invacare's respiratory group, “The most obvious impact is the significant reduction in reimbursement — a reduction as draconian as that imposed by the Balanced Budget Act of 1997. Since Medicare is often the benchmark for Medicaid and other payers, this can have a negative ripple effect throughout the industry and extrapolate to non-bid areas and non-Medicare patients.