Re: Response: Alarming Medicare price reductions
Ralph Nobbe
Description
Collection
Title:
Re: Response: Alarming Medicare price reductions
Creator:
Ralph Nobbe
Date:
6/17/2004
Text:
The Medicare code changes will also impact all the Stock and Bill programs.
Guess what will probably start to happen... All the MD's doing stock and
Bill with LSO's will start sending them BACK to the O&P providers because of
the lack of reimbursement. When the O&P providers say we can't accept
assignment either we will get painted as money grubbing providers by the
MD's in the patients eyes. Better plan and implement your strategy now.
Ralph W. Nobbe, CPO
-----Original Message-----
From: Orthotics and Prosthetics List [mailto:<Email Address Redacted>] On
Behalf Of <Email Address Redacted>
Sent: Wednesday, June 16, 2004 8:09 PM
To: <Email Address Redacted>
Subject: [OANDP-L] Response: Alarming Medicare price reductions
The only organization that responded was AOPA. They assure me that the are
aware of the issues and are doing everything possible. Here are the
responses.
In January of 2003 during the neg-reg Medicare stated there goal was to
reduce Medicare billings by 30%. They got that percentage from three
different sources:
The first was established nationally by the requirement of the VA to
discount off Medicare. In VA vision 16 high bid is2% off Medicare, low is
30% off Medicare the average bid is 15% off Medicare. (I have this
information in a letter from the VA)
The second was established on the 60 day test market from region C for
competitive bidding there were approximately 20-30 venders none o&p that I
saw in the list. The average savings again was form 20-30% This information
was on the region C web site.
The third was set forth during the Clinton administration with the health
card the O and P component was stated as no custom devices period.
Here are the national goals as I see them being set forth from the national
agenda. 1 centralize all fabrication. VA self provision 2 Establish service
centers nationally All military hospitals. ALL states have one. 3 Test
theory for 7 years to establish protocol. (open prosthetics for all vets
service connected and non service connected.
We are now in year 7 of the bidding process, year or 4 of the va production
and provision and year 2-3 of all services to vets both service connected
and non service connected.
The military and its agents are not required to have any educational
requirements and can self train. They will hire certified people and put
less qualified in low service areas. Prefab will go to a Bidding for
national servicing via an Apria or some other group larger than Hanger.
The price changes and code audits are to set up a need and desire to get our
moneys quicker with less hassle. competitive bidding dose . So dose
capitated bidding (Apria did this for all dme and oandp in 91-92 with Kaiser
hospital systems in California). This can be done but not at a fee an
insurance company will allow. The average price per member per month(PPMPM)
5 years ago when I was doing a study to put proposals together was between
50cents and a dollar. It looks good when you get the check but you have to
service any and all that come to your door the reverse is a negative,unless
you can separate out prosthetics. Competitive bidding dose its only
orthotics. The VA can service all prosthetics nationally for both private
and commercial care via the model I lade out.
We Can still salvage this issue in three years. But not the slow way ABC and
BOC are doing this. IF you want to see the future please go to my article in
the oandp edge march 2004 alternative entries into oandp.
I think you may have hit on how Medicare is getting around the L-code price
reduction guidelines. They first change them to K-codes and then cut them
to the bone. How can we deal with them? Well, why don't we find out the
salaries of these bureaucrats and then find out how we can get their job
done more cheaply, like maybe outsourcing their jobs to India. I think a
more aggressive posture is needed in dealing with Medicare rather than just
trying to stay under the radar and hoping that they will be fair.
Obviously, this has only emboldened them to come after a patient population
and industry group that seems to be willing to accept whatever they decide
is appropriate reimbursement.
David, I can appreciate your dilemma relative to the managed care
organizations. You have to ask yourself: if you cannot afford to provide
services at a loss neither can your competition. As hard as it may seem you
will be forced to not provide services unless a reasonable fee can be
negotiated with the MCO's. As long as providers (all of us included)
continue to provide services at a loss or near loss the MCO's will not
change what they are doing. Bottom line: too many of us are shooting
ourselves in the foot thinking that this is the only way to stay in
business. Remember: providing a lot of services at near cost may make you
feel busy but having files full of write offs will put you under. You are
better off providing less services for reasonable fees while fighting for
fair fees and staying in the black. Those who do it any other way will
probably not be around very long. Medicare along with all of the other third
party payers are testing the market to see how low they can force providers
to go. As long as there are those willing to provide services at or near
losses then the market testing will continue on. Hope this at least gives
you more to consider
It is not only region C that is being affected. I have checked our
allowables in Region A, and they are in the same ballpark. Unfortunately,
Medicare may be able to get away with this because they actually CHANGED the
HCPCS code number. The item we used to code as L0500 for at a $106.46
allowable is now coded as K0634 at a $55.58 allowable. We are still
discussing in plant what to do....Many HMO's -- if you do not carry the
item in stock and have to order it, you are not forced to provide under the
contract. We may have to go this route and just order as needed , no stock
on shelves...which unfortunately increases delivery time...I'd be interested
in seeing replies that you
It is horrible in Region C. Almost every other day it seems we are getting
those reviews from Palmetto. Trying to get the info from the doctors is
difficult, let alone some of them don't even have the necessary info in the
patient's record to necessiate the medical necessity for what they are
ordering. Where does that leave us? It is getting harder and harder to
stomach Medicare. I think that the only way they are getting away with the
LSO decreases, is because they changed the codes totally. From what I
understand AOPA is trying to get the allowables changed or at least trying
to set up meetings to start the process. How are we supposed to survive
with these allowables? They were bad enough to start with.
Guess what will probably start to happen... All the MD's doing stock and
Bill with LSO's will start sending them BACK to the O&P providers because of
the lack of reimbursement. When the O&P providers say we can't accept
assignment either we will get painted as money grubbing providers by the
MD's in the patients eyes. Better plan and implement your strategy now.
Ralph W. Nobbe, CPO
-----Original Message-----
From: Orthotics and Prosthetics List [mailto:<Email Address Redacted>] On
Behalf Of <Email Address Redacted>
Sent: Wednesday, June 16, 2004 8:09 PM
To: <Email Address Redacted>
Subject: [OANDP-L] Response: Alarming Medicare price reductions
The only organization that responded was AOPA. They assure me that the are
aware of the issues and are doing everything possible. Here are the
responses.
In January of 2003 during the neg-reg Medicare stated there goal was to
reduce Medicare billings by 30%. They got that percentage from three
different sources:
The first was established nationally by the requirement of the VA to
discount off Medicare. In VA vision 16 high bid is2% off Medicare, low is
30% off Medicare the average bid is 15% off Medicare. (I have this
information in a letter from the VA)
The second was established on the 60 day test market from region C for
competitive bidding there were approximately 20-30 venders none o&p that I
saw in the list. The average savings again was form 20-30% This information
was on the region C web site.
The third was set forth during the Clinton administration with the health
card the O and P component was stated as no custom devices period.
Here are the national goals as I see them being set forth from the national
agenda. 1 centralize all fabrication. VA self provision 2 Establish service
centers nationally All military hospitals. ALL states have one. 3 Test
theory for 7 years to establish protocol. (open prosthetics for all vets
service connected and non service connected.
We are now in year 7 of the bidding process, year or 4 of the va production
and provision and year 2-3 of all services to vets both service connected
and non service connected.
The military and its agents are not required to have any educational
requirements and can self train. They will hire certified people and put
less qualified in low service areas. Prefab will go to a Bidding for
national servicing via an Apria or some other group larger than Hanger.
The price changes and code audits are to set up a need and desire to get our
moneys quicker with less hassle. competitive bidding dose . So dose
capitated bidding (Apria did this for all dme and oandp in 91-92 with Kaiser
hospital systems in California). This can be done but not at a fee an
insurance company will allow. The average price per member per month(PPMPM)
5 years ago when I was doing a study to put proposals together was between
50cents and a dollar. It looks good when you get the check but you have to
service any and all that come to your door the reverse is a negative,unless
you can separate out prosthetics. Competitive bidding dose its only
orthotics. The VA can service all prosthetics nationally for both private
and commercial care via the model I lade out.
We Can still salvage this issue in three years. But not the slow way ABC and
BOC are doing this. IF you want to see the future please go to my article in
the oandp edge march 2004 alternative entries into oandp.
I think you may have hit on how Medicare is getting around the L-code price
reduction guidelines. They first change them to K-codes and then cut them
to the bone. How can we deal with them? Well, why don't we find out the
salaries of these bureaucrats and then find out how we can get their job
done more cheaply, like maybe outsourcing their jobs to India. I think a
more aggressive posture is needed in dealing with Medicare rather than just
trying to stay under the radar and hoping that they will be fair.
Obviously, this has only emboldened them to come after a patient population
and industry group that seems to be willing to accept whatever they decide
is appropriate reimbursement.
David, I can appreciate your dilemma relative to the managed care
organizations. You have to ask yourself: if you cannot afford to provide
services at a loss neither can your competition. As hard as it may seem you
will be forced to not provide services unless a reasonable fee can be
negotiated with the MCO's. As long as providers (all of us included)
continue to provide services at a loss or near loss the MCO's will not
change what they are doing. Bottom line: too many of us are shooting
ourselves in the foot thinking that this is the only way to stay in
business. Remember: providing a lot of services at near cost may make you
feel busy but having files full of write offs will put you under. You are
better off providing less services for reasonable fees while fighting for
fair fees and staying in the black. Those who do it any other way will
probably not be around very long. Medicare along with all of the other third
party payers are testing the market to see how low they can force providers
to go. As long as there are those willing to provide services at or near
losses then the market testing will continue on. Hope this at least gives
you more to consider
It is not only region C that is being affected. I have checked our
allowables in Region A, and they are in the same ballpark. Unfortunately,
Medicare may be able to get away with this because they actually CHANGED the
HCPCS code number. The item we used to code as L0500 for at a $106.46
allowable is now coded as K0634 at a $55.58 allowable. We are still
discussing in plant what to do....Many HMO's -- if you do not carry the
item in stock and have to order it, you are not forced to provide under the
contract. We may have to go this route and just order as needed , no stock
on shelves...which unfortunately increases delivery time...I'd be interested
in seeing replies that you
It is horrible in Region C. Almost every other day it seems we are getting
those reviews from Palmetto. Trying to get the info from the doctors is
difficult, let alone some of them don't even have the necessary info in the
patient's record to necessiate the medical necessity for what they are
ordering. Where does that leave us? It is getting harder and harder to
stomach Medicare. I think that the only way they are getting away with the
LSO decreases, is because they changed the codes totally. From what I
understand AOPA is trying to get the allowables changed or at least trying
to set up meetings to start the process. How are we supposed to survive
with these allowables? They were bad enough to start with.
Citation
Ralph Nobbe, “Re: Response: Alarming Medicare price reductions,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 22, 2024, https://library.drfop.org/items/show/223282.
