Great Lakes Home Medical Services Association Indiana State Council

1. Great Lakes Home Medical ServicesAssociationIndiana State Council Representing DMEPOS Providers

2. Great Lakes HME – Who We Are • Regional HME Association Representing Home Medical Equipment Companies serving Indiana, Illinois and Michigan: - Kevin Stewart – President; St. Vincent Anderson; Executive Director DME - George Kucka – Secretary; Fairmeadows Home Health Center - Paula Koenig – Board Member/Past President; Numotion - Chuck Williams – Board Member; Williams Brothers Health Care Pharmacy - Kelli Trissler-Member; Williams Brothers Health Care Pharmacy - Kam Yuricich – Executive Director; Great Lakes Home Medical Services Association - Laura Williard – VP of Payer Relations; American Association for Homecare

3. IndianaMedicaid Landscape

4. CURES Legislation • Will limit the federal contribution for DMEPOS for 255 select E, K, and A codes. • States can still set their own payment rates to ensure access to care. • States do not have to do anything to be in compliance with this regulation. • States will have to complete annual reconciliation by 3/30/2019. • Primary Fee For Service Claims Only • No MCO • No secondary claims • Aggregate expenditure for HCPCS code listing only • Include area patient lives or reconciliation will occur to lowest Medicare allowable in the state • Medicare Rates Unsustainable Due to Flawed Competitive Bidding Program

5. HME Suppliers Since 2013, 41.8% of HME suppliers nationally have gone out of business or been purchased due to unsustainable rates.

6. HME Supplier Market in Indiana • 38.9% of unique HME suppliers in Indiana have gone out of business or been purchased since 2013. • 34.1% of DMEPOS locations have closed since 2013.

7. Definition of HME-Industry Adopted • Delivery • Patient and/or home assessment to verify the appropriateness and safety of the prescribed item • Set-up • Instruction on: • Use and operation with return demonstration • Maintenance • How to seek assistance in the case of operational failure • How to report changes in medical conditions • Assistance in verifying insurance coverage and billing the patient’s insurance • Collecting needed documentation from physicians, hospitals, nursing homes, home health agencies and other healthcare professionals to support the medical necessity and coordinate care for such items • 24/7 availability of assistance for after hour and holiday services, where apropriate, including natural disaster or national emergencies (i.e. tornadoes, hurricanes, floods, blizzards, etc… which necessitate additional staff, time, equipment, and resources to help prepare, respond and recover from said events) • Acting as liaison between patient and clinician to assure appropriateness of service • Advocating on behalf of the patient where reimbursement was challenged by the insurance carriers

8. Impact of Competitive Bidding on Medicare Beneficiary Access to DME • The survey was completed by 428 patients, 358 case managers, and 266 suppliers. • 52% of beneficiaries reported problems. • 77.6% of case managers experienced difficulties with timeliness of discharge process due to HME access issues. • 89% of case managers report an inability to obtain DME in timely fashion. • Indiana fell in highest category of case manager responses by state

9. Dobson Davanzo Cost Study: Proportion of Costs • Cost of goods represents the largest proportion of costs for DMEPOS providers, yet reflects less than 60 percent of costs overall. • -- As reflected in the Federal Register, this amount is the only cost that CMS takes into account when computing its CB pricing. • Indirect and direct costs are those costs that are incurred by providers in the course of patient service.

10. Study Findings: Median Percent of Costs Covered All DMEPOS HCPCS included in the survey were reimbursed at a median of 88% of overall cost. The median percent of costs covered for each DMEPOS product category under study is presented below.

11. Medicaid and Medicare Key Distinctions: • Distinct Populations and Diverse Missions • Community Verses Home Use • Pediatric Population Cost Differentials • Social Security Act Directive • Payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan.

12. Legislative Landscape on Medicare Rates • Legislative precedence for rate changes in Medicare program will create even more unstable reimbursement environment. - Cures Impact to July 1, 2016 fee schedule retroactive • Interim Final Rule-Published in OMB’s Fall Unified Agenda Listing • Retroactive to August 1, 2017 change of Medicare fee schedule to 50/50 blended rates • HR 4229-Protecting HOME Access Act of 2017 - Bi-partisan support to-date from Indiana Congressional reps: Rep. Bucshon MD, Rep. Rokita & Rep. Visclosky

13. Issues with SPA set to follow Medicare Rates • Retro fee schedule changes will have to be reprocessed at new allowables • Impacting 1941 codes-not just those in CURES mandate • Cures only impacts 388 HCPCS codes covered by Medicaid • Includes rental and sale for same hcpcs • 202 over Medicare allowable • HCPCS not on cures lists • 258 over Medicare allowable

14. Operational Concerns • How much time will Indiana Medicaid need to load the 2018 rates? • Due to timing of CMS fee schedule rates, what is the plan for processing claims with dates of service 1/1/18 and after? • Medicare fee schedule has multiple rates for some codes that depends upon the members zip code, modifier, and usage. Indiana Medicaid does not recognize many of these modifiers. How will Indiana Medicaid determine which allowables should be used? • BR201748 is not clear on whether the adoption of 2018 Medicare rates will apply to the specific codes included in the Cures Act or if there is any other intent to revise fees. • Enteral • O&P • CRT Accessories • Medical Supplies

15. Great Lakes – Indiana State Council Request • Freeze rates for 2018 calendar year. • Work with CMS and Great Lakes to analyze spend verses Medicare allowables. • CMS has agreed to perform initial and quarterly analysis to determine states risk. Contact information - Great Lakes Home Medical Services Association Kevin Stewart, President Kam Yuricich, Executive Director St. Vincent Anderson Great Lakes headquarters kevin.stewart@stvincent.org kam@greatlakeshme.org 765-608-2684 PH 877-279-1707 PH