Response: Alarming Medicare price reductions

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.