In August, the American Association for Homecare (AAHomecare) released a survey of home medical equipment (HME) suppliers that put a spotlight on the impact of substantial Medicare rates cuts, which went into effect in January 2024.
The 75-25 Impact Survey revealed that, after six months’ time, the loss of 75-25 blended rate relief is causing widespread financial strain throughout the industry. More than 100 HME suppliers participated in the survey and reported they were either cutting back on the products and services offered, reducing service areas, laying off staff and/or using personal savings to keep their businesses in operation. One in eight respondents indicated they are actively considering or planning to close their business entirely.
If left unchecked, the potential damage to the HME infrastructure and implications for patient access to HME could be long-lasting and irreparable.
“I have been in business 31 years, and we love our community and (serving) our Medicare population, but sadly, it has come to a breaking point,” one supplier said.
The survey results and the open-ended comments resonated with me. Eleven years ago, my company lost access to supporting Medicare beneficiaries after submitting what we believed were responsible round two bids. To make payroll and continue servicing patients, I stopped taking a salary and tapped my own 401k. I know what it feels like to face the prospect of losing a company you built and see decades of savings depleted—it’s painful and scary. However, when you’re working with people who need respiratory care or other vital HME products and services to remain at home, there’s a desire to do everything you can to continue to support them.
An Opportunity for Advocacy
The stress that suppliers often feel highlights the urgency to restore the 75-25 blended rates this year. AAHomecare and other advocacy leaders, including VGM and state and regional HME associations, have worked for nearly two years to build support for legislation that would put this relief back in place. With the support of our representatives in Congress, we’ve seen HR 5555 and S 1294 pass through committees of jurisdiction for health care finance. Now, we need an all-out, industry-wide, grassroots push to pass this relief into law.
More specifically, we need people from every part of the HME community to make at least one more direct connection with their legislators to move our bills forward. We urge you to look at what suppliers are reporting in our survey and think about how current Medicare reimbursement rates—and the other rates they influence—are impacting your business. Additionally, you can share your pain points with your senators and representatives and let them know how the patients and caregivers you support are being affected—or will be, if the reimbursement environment doesn’t improve.
We have guidance on who to contact, how to reach them and messaging ideas here. Additionally, we can find contact information for staffers who handle health care issues for your members of Congress. Our grassroots support is available for everyone in the HME community, not just AAHomecare members.
Getting the Attention of Leadership
The most likely avenue to see HR 5555 and S 1294 passed into law is to have their provisions be included in a broader legislative package. Capitol Hill insiders believe there will be at least one more package of health care bills before the end of the session. Accordingly, our messaging focuses on asking your senators and representative to make sure that our 75-25 blended rate relief is part of that package.
HME advocates will compete for Congress’ attention with a multitude of interests to make the cut for an end-of-year package. In this environment, we need everyone on board to increase Congress’ priority of the 75-25 relief.
If you’re an experienced HME advocate, we need you to contact your senators and representatives at least one more time. If you’re an HME influencer or leader, we need you to inspire others to take action.
If you’ve never reached out directly to your legislators, there has never been a better time to send that first email. Utilize our complimentary, on-demand Advocacy 101 Webinar to gain confidence in engaging legislators with tactical guidance and tools.
If you want to improve your company’s bottom line and its ability to support patients and caregivers in your community, take part in this effort.
Looking Beyond 75-25 Relief
While this legislation is focused on re-establishing the 75-25 blended rates in non-bid/non-rural areas, these rates also impact Medicaid rates in more than 20 states and other payers, including Medicare Advantage plans and TRICARE. Seventy-nine percent of our survey respondents reported Medicare Advantage rate cuts for beneficiaries they serve, 51% have seen cuts for commercial payers and 34% are experiencing cuts for Medicaid since Jan. 1, 2024.
We are continuing to engage the Centers for Medicare & Medicaid Services (CMS) and Congress on the need for reimbursement rates that reflect market reality in former competitive bidding areas. Even with annual consumer price index increases, these rates are not keeping up with rising product and operational costs. A successful effort to restore the 75-25 rates in non-bid/non-rural areas would send a strong message to CMS that broader relief is needed.
We have less than three months left to make our case before the 118th Congress closes, and we can’t miss this opportunity to secure a more sustainable reimbursement environment for the HME industry.
