Mobility
Simple Math: 9.5 Percent Cut Simply Doesn't Work for Complex Rehab
ATLANTA--Even as HME providers are gearing up for a 9.5 percent reimbursement reduction in 10 product categories Jan. 1, complex rehab stakeholders are racing against the clock to get the segment exempted from the cut.
The problem is, it will take an act of Congress to do it--and Congress is in recess until September.
“Congress is really in session for only another four weeks [after lawmakers return],” said Seth Johnson, vice president for government relations for Exeter, Pa.-based Pride Mobility Products and a member of the American Association for Homecare’s Rehab and Technology Council.
When the nation’s federal legislators return to Washington after their August break, they will work on appropriation bills and perhaps another economic stimulus package; then, because it is an election year, “they are going to be gone for the remainder of the year,” Johnson said. “There’s going to be legislation that moves through very quickly. That’s why time is of the essence for us to communicate this with legislators.”
At issue is the effect a 9.5 percent cut will have on the complex rehab industry. The cut, which was mandated by H.R. 6331, delayed competitive bidding for at least 18 months and also exempted complex rehab from any future competitive bidding project. But the 9.5 percent cut includes the project category, which is known for its slim profit margins, a fact documented by the recent study produced by the University of Rochester’s Simon Business School.
According to the study, which surveyed companies ranging in annual revenue from $250,000 to $21 million, those in the small sector (less than $5 million) had a pretax profit of 3.44 percent; companies in the medium category ($5 million to $10 million) averaged 6.87 percent in profit; and large companies ($10 million and above) had profits averaging 4.83 percent.
