HME News

JAN 2019

HME News is the monthly business newspaper for home medical equipment providers. This controlled circulation publication reaches 17,100 home medical equipment services providers, including traditional HME dealers & suppliers, hospital- and pharmacy-o

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Reshaping next round of competitive bidding . . . . . . . . . . 1 Q&A: Congressman-elect Dan Meuser . . . . . . . . . . . . . . . . 3 Newspoll: Is the industry in a buying slump? . . . . . . . . . . . 3 Groups re-energize marketing efforts . . . . . . . . . . . . . . . . . 6 ■ 2019 will be a busy year for working payer relation issues around the country, says Laura Williard. See story this page. News Health spending slows year over year, says Office of the Actuary WASHINGTON – Overall health spending grew 3.9% in 2017, almost 1% slower than 2016, according to a study conducted by the Office of the Actuary at CMS and pub- lished in Health Affairs. Medicare spend- ing grew 4.2% in 2017 vs. 4.3% in 2016. Slower growth in fee-for-service Medicare spending (1.4% in 2017 vs. 2.6% in 2016) offset faster growth in Medicare private health plan spending (10% vs. 8.1%). The trends in Medicare FFS and Medicare pri- vate health plan spending are attributed, in part, to an increased share of all Medi- care beneficiaries enrolling in Medicare Advantage. Medicaid spending slowed, increasing 2.9% in 2017 vs. 4.2% in 2016. The reason: a deceleration in enrollment growth, and a reduction in net cost of Med- icaid health insurance from an increase in recoveries from Medicaid managed care plans. State and local Medicaid expendi- tures grew 6.4%, while federal Medicaid expenditures increased less than 0.8%. Out-of-pocket spending, which includes direct consumer payments like copays and deductibles, grew 2.6% in 2017 vs. 4.4% in 2016. Nevada votes to exempt DME from sales tax CARSON CITY, Nev. – Residents of Nevada in November voted in favor of exempting durable medical equipment from sales tax, according to a bulletin from VGM. Sixty-seven percent of voters approved the measure, which amends the Nevada Constitution to remove sales tax applied to DME, oxygen delivery equipment and mo- bility equipment when prescribed by a li- censed healthcare provider. Provider Doug Bennett, of Bennett Medical Services and NAMPS, rallied grassroots efforts to advo- cate for the change. CQRC sends letter to Verma on vents WASHINGTON – The Council for Quality Re- spiratory Care has sent a letter to CMS Administrator Seema Verma expressing its "serious reservations" with the proposal to include home ventilators in the competi- tive bidding program. "The CQRC is deep- ly troubled and confused by the proposal to add three types of ventilation devices, which are used by highly vulnerable Medi- care beneficiaries who otherwise could not remain in their homes, to the competitive bidding program before the modified poli- cies have been implemented," the letter states. CMS included the proposal to in- clude ventilators, as well as off-the-shelf back and knee braces, in a recent final rule. Comments on the proposal were due Dec. 17. People news Jerry Stone has been appointed to AA- Homecare's board of directors. Stone is vice president of payer relations for Na- tional Seating & Mobility. www. HMENE ws. COM / j AN u AR y 2019 / HME NE ws 3 By Liz Beau L ieu, e ditor WASHINGTON – Dan Meuser, a familiar name in HME circles, won his bid to represent Pennsylvania's 9th congressional district in Novem- ber, the next step in his commitment to "improving people's lives," he says. In his past role as president of Pride USA, Meuser helped to get mobility equipment into the hands of people with disabilities and senior citizens. As a new congressman, he aims to address the frustra- tion with the current "decision-making process and lack thereof" in By Liz Beau L ieu, e ditor H ME P rov IDE r S aren't necessarily holding off on equipment purchases in the months lead- ing up to Medicare's any willing provid- er provision going into effect, accord- ing to a recent HME Newspoll. A slight majority of poll respondents (58%) say they're still buying, despite an uncertain Medicare landscape starting Jan. 1, when CMS plans to let its competitive bid- ding contracts expire and let all enrolled providers supply DME- P o S. By Liz Beau L ieu, e ditor " W E b E l IE v E we're on the cusp of another 2012," said Dexter b raff, president of The b raff Group, during a web- cast in November on the M&A outlook for HME. What happened in 2012? According to The b raff Group: The number of HME deals jumped to 107, up from 71 in 2011 and 59 in 2010; and the number of private equity deals Buying slump? It's a tough call Is HME industry headed for another 2012? also jumped to 10, up from four in 2011 and 2010. 2012 was also the year after CMS kicked off its competi- tive bidding program in the country's largest cities on Jan. 1, 2011. Putting two and two togeth- er: Investors thought, after the first round of bidding, that reimbursement wouldn't go any lower, so they pressed the gas on deals. "They thought they knew where the space was headed and that reimburse- ment wouldn't go down from where the first round settled," b raff said. Investors, as we know, were wrong. Subsequent rounds of bidding resulted in lower and lower reimbursement, and deal activity suffered. According to The b raff Group: There were 68 deals in 2013, 61 deals in 2014, 47 deals in 2015 and 40 deals in 2016. There were four private equity deals in 2013, five in 2014 and 2015, and three in 2016. "There was a significant retreat," b raff said. "They saw that in subsequent rounds there were new bottoms to be found." So why are we on the cusp of another 2012, when deal activity was at a 10-year high? Q&A: Dan Meuser d A N M e u s e r s e e pa g e 4 N e W S p O l l s e e pa g e 6 b R A f f s e e pa g e 6 Dexter Braff Dan Meuser, center, celebrates his successful bid for a seat in the U . S . House of Representatives . The former president of Pride USA will represent Pennsylvania's 9th congressional district . "We don't base our decisions on the whims of the federal gov- ernment," wrote one respondent who's still buying. Invacare recently blamed a decrease in sales for the third quarter, in part, on providers holding off on equipment pur- chases until they reassess the market in 2019. o ne respondent is still buying so they're ready for the potential increased business that an any willing provider pro- vision may bring. "When you are a new startup, you need to be on the offensive," wrote one respondent. "The rates are not great, but with a good selec- tion of types of equipment, we should be fine." For a number of respondents, HME NEWS POLL By Theresa F L aher T y, Managing e ditor WASHINGTON – The past year has been a busy one for AAHomecare's l aura Williard: She met with 28 states about Medicaid rates. 2019 is shaping up to be just as busy, she says. Per the 21st Century Cures Act, passed in late 2016, the federal portion of Medic- aid reimbursement for HME cannot exceed what Medicare allows. States can either base their Medicaid rates on Medicare's lowest fee schedule; or, they can gather aggregated data using their Medicaid rates and utiliza- tion rates by area for 2018. "We will be working with states around that reconciliation process and hopefully keep them from having too much at risk," said Williard, vice president of payer rela- tions. "I am hoping we don't have a lot of plans that just start changing their rates to Medicare rates." So far, 18 states have indicated they plan to go through the reconciliation process, while several others have yet to make a decision, says Williard. The rest have already moved to Medicare rates or said they would not change their rates. Williard is also developing a state toolkit to help providers around the country lobby at the state level for legislative and regula- tory changes. The toolkit will have ideas and suggestions, and actual language that can be implemented in states, said Williard. "I've been pushing really hard this year from a state perspective to do some state leg- islative lobbying," she said. "There are more wins easier at the state level than wins at the federal level." For example, she's putting together lan- guage related to Medicaid MC o s and their increasing tendency to reduce rates and limit provider networks, but there are plenty of other challenges, too. "We will work with all the state associa- tions in the next year to say, 'Hey, which of these issues do we want to work on,'" she said. h M e laura williard on payer relations Cures Act, state toolkit on agenda 'Due to new developments, we've reduced all purchasing until the new year,' says one repsondent

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