Lisa has noticed that I can’t stop thinking about work lately, and it is true – with good cause. I’m going to write specifically on my family business, and nothing else. We are a DME, and our biggest coverage item is oxygen, so it’s a very narrow scope. And while I’m speaking specifically on Medicare, most private insurers follow Medicare guidelines.
I agree in principle that health care reform is necessary. I believe that insurance companies have gotten a bit over the top with coverages – it makes sense. I personally haven’t seen any major issues with DME, except with oxygen.
Medicare instituted a 36 month cap for O2 coverage. That basically means that after 36 continuous months, a patient no longer pays for oxygen but as a company we’re obligated to provide oxygen; we can start billing again after 60 months. On top of that, we have to service the equipment and supply them with portable O2. The law came in effect in 2008 starting 2009, and was retroactive (?!) back to 2006. So of course, we were hit immediately.
And on top of that, we were required to carry a $50,000 surety bond. And we were up for re-accreditation for this year. And finally, we’re (theoretically) part of competitive bidding, which is the grand old race to the bottom of the industry where we fling ourselves to the mercy of Medicare and offer to cut more from our ever shrinking income.
A number of DMEs have folded. Simply disappeared. Because of the way the cap works, some of these patients are in their 37 month onward looking for a supplier. You know what? They’re going to have a tough time to find one. In some parts of this country, up to 50% of O2 suppliers have disappeared. We’re hanging in there, but that’s mostly luck – if we were in the first round of bidding, we would’ve been closing shop this year.
We can’t be Florence Nightingales. We’re not working for a pat on the back or a ‘job well done’. We have bills, we have overhead, and we have to pay for gas – people don’t come to us, we go to them. This is a labor intensive field, and with all these contractions the patient is getting screwed.
I don’t have a solution nor will I offer one. We’re certainly a niche provider in the grand scheme of things – which is probably why it so easy to squeeze all of our margins. There are incredibly large O2 suppliers out there – but they’re like any major corporation. I have many of our patients’ names, addresses and phone numbers memorized. We try to take care of them (and have taken care of them) at all hours of the day and night. When we get pushed out, it won’t be for the better.
If there is only observation I could offer it would be that it seems like the ultimate goal is to move people into institutionalized care, instead of home care. I’ll leave it at that.
In any event, we’re still standing… barely. Hopefully 2010 is a bit better for us.
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