Medicare Cuts Pose Problems For Medical-equipment Suppliers, Users

August 05, 2016


Tuesday, July 19, 2016

By Mark Bliss ~ Southeast Missourian

Patrick Naeger worries he may have to shut down his home-medical-equipment company in the face of continuing federal cuts to Medicare reimbursements.

He said he’s not alone.

“The whole industry is in trouble,” said Naeger, who operates a Perryville, Missouri-based firm that provides medical equipment such as oxygen tanks and wheelchairs to residents throughout a wide swath of Southeast Missouri and Southern Illinois.

In January, the federal Centers for Medicare and Medicaid Services enacted the first of two cuts to reimbursements for home-medical equipment and supplies. On July 1, the second round of cuts took effect, Naeger said.

According to CMS, federal reimbursements, on average, have been cut by more than 50 percent.

CMS has determined new reimbursement prices on everything from hospital beds to infusion pumps based on an analysis of prices submitted by various suppliers across the country.

CMS has said the new arrangement “will reduce out-of-pocket expenses and save the Medicare program money while ensuring beneficiary access to quality items and services.”

But Naeger said the cuts have had the opposite effect.

“Home-medical-equipment companies throughout the country cannot survive with these rates,” he said.

“My cost and overhead have not gone down,” he said, adding, “Cuts and rationing of care will severely hurt some of our most vulnerable citizens.”

Naeger, executive vice president of Healthcare Equipment and Supply Co., said many providers will be forced to require their Medicare customers to pay up front for items.

The customers then would be reimbursed by Medicare at the reduced rate.

“Charging the Medicare beneficiaries up front is the last thing any of us want to do,” Naeger said. “But we are left with no choice. We have already cut everything we can cut in order to survive in business, and this is the only option we have.”

Customers already are paying a premium for Medicare Part B to cover medical equipment needed in their homes, he said.

In February, one of Naeger’s customers, Stephanie Grunau of Puxico, Missouri, said she was frustrated and angered by the first round of Medicare cuts.

“You expect to have benefits,” said Grunau, whose seriously ill husband depended on a ventilator to breathe.

Naeger said his company charged $180 a month for round-the-clock supply of oxygen in the past. Now, Medicare will pay only $86 a month.

“My cable bill is higher than that,” he said.

Some customers can’t afford to pay for equipment and supplies up front. As a result, they will end up in hospital emergency rooms or in nursing homes with worsening health issues, he said.

The end result is higher medical costs for such patients and higher federal spending, Naeger said.

Cutting federal reimbursements for home-medical equipment has little effect on total Medicare spending — amounting to only 1.3 percent of the total Medicare budget, Naeger said.

Only Congress can fix the problem, said Naeger, a former state lawmaker.

But despite support among a number of lawmakers, Congress has not acted to put the cuts on hold, he said.

“This is crazy,” he said.

With the Republican and Democratic presidential nominating conventions and summer recess, Congress won’t reconvene until September, according to Naeger. Meanwhile, he said, businesses like his struggle to hang on.