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Blue Ribbon Commission Report Includes Cuts to the most Cost Effective form of Healthcare – two of the nine Commission proposals are cuts to home medical equipment and supplies

Wednesday, July 29, 2020 @ 01:07 PM  posted by jbuytaert

July 15, 2020
Courtesy of MAMES, 651-351-5395/info@mames.com

St. Paul, Minnesota — People who rely on Minnesota Medical Assistance who need home medical equipment and supplies, such as wheelchairs, hospital beds, incontinence and other medical supplies, may experience access issues should Minnesota Health and Human Services (HHS) proceed with two proposals included in the draft Final Report of the Blue Ribbon Commission on Health and Human Services.

Two (2) of the nine (9) Blue Ribbon Commission (BRC) proposals under “Cost Savings Strategies: Health Care,” directly impact providers of Durable Medical Equipment (DME), also known as home medical equipment (HME) and medical supplies:

  1. VOLUME PURCHASING DURABLE MEDICAL EQUIPMENT: expands the use of volume purchasing to additional types of DME products, including enteral nutrition, wound care supplies, and standard wheelchairs and walkers.
  2. MODIFY CERTAIN MEDICAL ASSISTANCE DURABLE MEDICAL EQUIPMENT PAYMENT RATES TO MATCH MEDICARE RATES. Modifies Medical Assistance fee-for-service payment rates for select DME and supplies.

MAMES opposes the strategies for the following reasons:

Both proposals will not produce the amount of savings HHS expects to see without having an impact on access to HME and medical supplies for the population needing these items.

  1. 1. VOLUME PURCHASING DURABLE MEDICAL EQUIPMENT:
  • Per BRC reports1, spending on DME and supplies constitutes less than 3 percent of Medicaid fee-for service budget.
  • Medicaid currently has volume purchasing for oxygen, hearing aids and diabetic test strips. These items are vastly different from the other equipment and medical supplies they are proposing to volume purchase.
    • Most items listed, like wheelchairs and walkers, are already set by a volume purchase program — Medicare’s competitive bid program (CBP).
      • That CBP pricing established the upper payment limit for Medicaid federal cost sharing for those items addressed by the 21st Century Cures Act.  In legislation passed in 2019, Minnesota Medicaid already reduced payment rates on those items to Medicare rates, including walkers, wheelchairs, hospital beds and other common DME items.
      • DME providers would not go below what is already the lowest fee schedule for those items included in the Medicare CBP.
      • Enteral nutrition, which had been included in the initial rounds of Medicare competitive bidding, was specifically excluded for the 21st Century Cures Act upper payment limit, presumably because the enteral food prices that had resulted from the competitive bid process, caused significant access issues for Medicare patients who needed enteral nutrition.
      • As indicated in the BRC Report, in 2017, the legislature directed DHS to volume purchase adult incontinence products. During implementation DHS was sued and subsequently in 2019 the legislature prohibited DHS from volume purchasing adult incontinence products because of the impact it would have on the disability and beneficiary community not to mention the providers of HME and medical supplies.

  1. MODIFY CERTAIN MEDICAL ASSISTANCE DURABLE MEDICAL EQUIPMENT PAYMENT RATES TO MATCH MEDICARE RATES.
  • Medicaid already matches Medicare rates: Outside of a few categories within DME and medical supplies, as explained in #1 above, Medicaid is currently paying Medicare rates.
    • NOTE2: In March 2020, in the CARES Act, Congress recognized that the low rates imposed on HMEs in non-rural, non-competitive bid areas (comprising most of Minnesota) were too low and risked creating access issues during the COVID-19 pandemic. Language was included in the CARES Act that increased Medicare reimbursement in those areas.
    • Further reductions to DME reimbursement for the Medicaid population to the items not already reduced to the Medicare fee schedule will devastate all providers who care for the Medicaid population which is vastly different than Medicare.
    • Providers would no longer be able to provide the same products and services where the reimbursement does not cover their costs.  In addition, it will eliminate any estimated Medicaid program savings by shifting those savings to long-term care expenses.

With the current COVID-19 pandemic, where there is the need to shift patients from hospitals and long term care and into the home, the DME and medical supply providers have been extremely crucial in the continuum of care that enables patients to be in their homes with the equipment and medical supplies needed.

The continued reductions in Minnesota Medicaid reimbursement with massive reductions in 2019 has had impact on DME providers. The proposed cuts by the BRC will further erode the number these healthcare providers at a time where care in the home is the safest and most cost effective form of healthcare there is. If DME providers are forced to close their doors due to reimbursement levels that are not sustainable, there will not be an adequate network of providers to service the disability community.

The Blue Ribbon Commission is currently seeking comments from the public on their Report. The deadline to submit comments is July 31st, 2020.  MAMES will be providing comments.

1 Total spending on health care by DHS is projected to be in excess of $12.3 billion in FY 2019 (per the BRC October 10, 2019 handout, slide 47).

  • Fee-for-service represents 25% of this total (per BRC January 14, 2020 handout, slide 19), so fee for service spending exceeded $3 billion in 2019.
  • The total spend on fee-for service DME and supplies is estimated to be only $87 million in SFY 2020-21 (per the BRC January 14, 2020 handout, slide 48).
    • This means that spending on DME and supplies constitutes less than 3 percent of fee-for service budget.

2 Section 3712(a) of the CARES Act requires payment in non-competitively bid areas other than rural or non-contiguous areas be based on a blend of 75 percent of the adjusted fee schedule amount and 25 percent of the unadjusted fee schedule amount from March 6, 2020 through the duration of the PHE. In May 2020, CMS released an Interim Final Rule with Comment Period (CMS-5531-IFC) Durable Medical Equipment Fee Schedule that contains the changes required under section 3712 of the CARES Act.

The Midwest Association for Medical Equipment Services (MAMES) mission is to be a premier Association of Home Medical Equipment Suppliers unified by education, advocacy, and collaboration. MAMES represents nearly 250 providers, manufacturers, and service representatives across the states of Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wisconsin.  For more information on MAMES please contact Rose Schafhauser, MAMES, Executive Director at: 651-351-5395 or at info@mames.com.

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