In the world of home medical equipment, there's a big voice emanating from a small Pennsylvania borough these days, one that is gaining the ear of Congress and eloquently advocating for providers and Medicare beneficiaries alike.
It belongs to Blackburn's, a nearly 75-year-old regional pharmacy and HME company situated in Tarentum, Pa., which is nestled along the Allegheny River 22 miles northeast of Pittsburgh. For just about a decade now, Blackburn's has played a vital role on the HME political stage on both state and national levels.
Few on that stage would argue that Georgie Blackburn, Blackburn's vice president of government relations and legislative affairs, is among the most articulate and knowledgeable HME providers. She's served as president of the Pennsylvania Association of Medical Suppliers and is vice chair of the American Association for Homecare's board of directors — and she's well known among Washington legislators. Along with other providers, she continues to battle competitive bidding, respiratory and mobility reimbursement cuts and the ever-present threat to access for beneficiaries.
“We're fighting against what is wrong for our patients and wrong for our company,” Georgie Blackburn says.
How did a small, family-run company get to this place? Call it a sense of responsibility.
“We thought we had an obligation to do more,” says Georgie's husband Chuck Blackburn, co-owner and chairman of the company's board of directors.
Doing More
That obligation has been a Blackburn's hallmark ever since Chuck's father established the business in 1936. It was a simple pharmacy until the late 1950s when Chuck, by this time a pharmacist himself, joined his father in the business.
“I started responding to a lot of inquiries from people wanting home medical equipment,” he recalls. “Patients were being discharged much quicker [from the hospital], and they needed home medical equipment to complete their recuperation.”
Blackburn's cultivated relationships with the county nurses, then various nursing enterprises, helping them to obtain necessary HME products for their patients.
“That's how we changed our business model from strictly pharmacy into an HME company,” Chuck explains, adding that they eventually also got into wound care and ostomy products. In the early 1970s, he took over the business from his father and partnered with fellow pharmacist Ron Rukas, now co-owner and president.
Blackburn's growth spurt surged in the 1980s. “We grew by leaps and bounds because by this time, the DRGS [diagnostic-related groupings] were totally ruling hospital discharge planning. There were many more home health agencies and commercial agencies established, and there was more home care activity,” Chuck says.
With the pharmacy growing steadily as well, Blackburn's began adding employees. “When it was just my father and me, we had four employees,” Chuck recalls. By the time Georgie joined the organization in 1978, they had seven employees. Today, there are 150.
By 1989, Blackburn's had incorporated; by 1995, it had become accredited. The company's continued growth prompted compartmentalization into five distinct areas: pharmacy, both retail and mail order; rehab/HME, which also includes the service department; respiratory; medical supplies; and bariatric and support surfaces. Currently, about 20 percent of the company's revenue comes from Part B Medicare.
The company is also spread out among four buildings. “We have sort of a campus in Tarentum, if you can imagine a campus in a small mill town by the river,” Chuck says with a chuckle.
Blackburn's also runs a smaller business in Erie, Pa., without the pharmaceuticals; a retail and HME company in Cranberry, Pa.; and an institutional distribution operation in Buffalo and Rochester, N.Y., that specializes in bariatric products.
“We're definitely a regional provider. That's what has been our model, to be a one-stop shopping resource for the home care delivery team,” Chuck says.
The company's growth has evolved from that obligation to do more.
“We started out fulfilling the needs of patients and referral sources. That has really dictated a lot of the product lines and services we've done,” notes Rukas. “As time has gone on, we have had to formalize a more efficient company in our policies and procedures and our operations.”
Doing More Politically
That is actually what led to the company's political activism. Georgie, an ATS, had always worked in rehab at the company. When she moved into the role of compliance officer, things began to change.
"We never took an active role until about 2000," Georgie says. "In the midst of my compliance role, I started to learn more about how things really worked. And I learned that our destiny is at least partially in our hands."
"For us, there was a big opportunity to educate and to teach legislators as to what was going on with viable information they could use rather than just complaining about things," adds Chuck.
But it wasn't just about education. It was about change, a point that hit home when Georgie met John Shirvinsky, who would become the executive director of PAMS. She was on the team that interviewed Shirvinsky for the job. He had a lot of lobbying experience and, upon hearing the challenges that faced the HME industry, he said something that resonated with her.
"He said, 'Any policy can be overturned, you know that,'" Georgie remembers.
Those words came at what she says was a "convergence of fates." The DMEPOS competitive bidding project was in the works at the Centers for Medicare and Medicaid Services, oxygen and mobility reimbursements were threatened, states were handing down damaging Medicaid edicts — and beneficiaries stood to lose ground on every front.
Blackburn's decided to fight for change, for what the company's owners believed was right. They created the position of vice president of government relations and legislative affairs, and Georgie moved into the role. It's been an investment of time and money, but the Blackburns and Rukas believe it is critical to the health of their business and their beneficiaries.
"No matter what policy is being considered, it has to be good for the provider and the end-user," Chuck states. Right now, the biggest threat to both is "definitely competitive bidding," he says.
In 2007, even as the company prepared its bids for Round 1 in the Pittsburgh MSA, Blackburn's worked to stop the program. Representing AAHomecare, Georgie testified before a House Small Business subcommittee that competitive bidding would hurt small providers and "undermine the nation's home care infrastructure."
The company won contracts in five Round 1 categories — complex rehab, standard power, oxygen, hospital beds and NPWT — and later signed a contract for walkers "due to other 'winners' not signing on," Georgie discloses. But Congress delayed the program two weeks after CMS' initial rollout in July 2008, and in early 2009, Georgie testified against competitive bidding again at another House subcommittee hearing.
"It will eliminate 90 percent of the home care providers — typically small, family-owned businesses — in any marketplace where it is implemented," she told the congressional committee.
But now Round 1 is back and set to begin in January. Blackburn's has entered bids in all categories (the first order of business is survival, Georgie points out) but continues to lobby legislators for support of H.R. 3790, the bill that would eliminate the national bidding program.
"It's unusually important that we succeed with H.R. 3790," Georgie says. "[Under competitive bidding], our disabled and elderly would be reduced to an auction system … The real issue is accessibility."
That really bothers a company like Blackburn's, where patients are the focus.
"I think the people who are making health care policy have to ask themselves a simple question: Don't disabled and ill Americans deserve the best that money can buy instead of the cheapest?" says Chuck.
"Our tag line is, 'Helping people to live life better.' I believe that really epitomizes what our business is about," adds Georgie. "We are in it to help our customers." She believes that is the case for the vast majority of HME providers and as such, they should be involved in political activism, too. That may not be on the level of Blackburn's, however.
"There is some reality," acknowledges Rukas. "All providers don't have the same resources, the same personnel or the same mindset."
"But they have the ability to use their phones," Georgie points out. "Not everyone has the ability to put the money forward, but everyone can work the phones once a week and stay in touch with their legislators … You can't underestimate the power of your voice, especially speaking with your heart and your passion. I think that does resonate with your legislators. They do try to work with you. It's been an epiphany for us."
After all, she continues, "when you're talking about closing your doors or the diminishing of service, you're talking about the legislator's constituents."
Urges Chuck, "The HME business can't afford to just wait and see what is going to happen … We have to be proactive if we want to create our own destiny."
- Read the "5 Tips to be Tops" sidebar to learn what the Blackburn's management team thinks it takes to excel in the HME sector.
5 Tips to be Tops
What does it take to excel in the HME sector these days? At Blackburn's, the recipe is diverse, according to the management team of Chuck Blackburn, Ron Rukas and Georgie Blackburn. Here are the key ingredients:
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Know the rules and follow them. Know the local coverage determinations. Do internal audits.
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Train your staff.
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Become an advocate and have a voice in your state and federal associations. "Part of advocacy is also staying in touch with your customers … not to market what we do but to update them on what things will affect their health care. They need to become their own advocates and we need to educate them," Chuck Blackburn says.
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Be proactive. Look for ways to become more efficient and improve your processes on a consistent basis. New technology can help, but even making your current technology do everything it is equipped to do can help.
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Be diversified in both product lines and payer sources.
Taking these five measures should add value to your company, the Blackburn's trio says. And they add one for good measure: Provide the service that your customers need.
