Business Solutions

Healthcare's Last Mile

HME filled critical gaps in care & fortified referral bonds during Covid-19. Now what?

• By David Kopf
• Feb 01, 2022

Some might consider it an exaggeration, but HME providers helped save American healthcare during the worst days of the Covid-19 public health emergency (PHE). The reach of hospitals only extends so far, but almost at the outset, HME providers showed they could close that “last mile” gap between the hospital and the homecare setting. If they hadn’t, one shudders to think how hospitals would be faring at this moment.

Even before the public health emergency and the pandemic really made itself felt in March 2020, many HME providers — and particularly respiratory providers — were implementing telehealth solutions and transitioning their back-office personnel to work-fromhome arrangements. So, by the time the pandemic was hitting its first bump up to 20,000 new daily cases in late March/early April, many HME providers had already laid the groundwork to help mitigate the pandemic’s impact.

When Covid-19 diagnoses started ramping up to more than 65,000 daily new cases in summer 2020 and then 170,000 in winter, ICUs, CCUs and even entire units that were dedicated to Covid-19 patients were quickly overwhelmed. Hospitals were resorting to providing emergency services in military hospital-style tents erected in parking lots. The question being asked across the entirety of U.S. healthcare was how were beds in hospitals going to get freed up, even if that meant providing more acute care in the home?

“The primary part of healthcare that created that release valve and opened up bed capacity is DME,” Marx says Josh Marx, managing director sleep and vice president of business development for Medical Service Company (medicalserviceco.com) in Cleveland, Ohio. Marx adds that if a patient wasn’t going to spend a long time (and perhaps their final days) in the hospital, then “they were being discharged rapidly and put on oxygen.”

REINVENTING RESPIRATORY

Early into the PHE, respiratory providers were working with hospital discharge staff to accomplish a smooth transition.

“That’s where the DME space lives,” Marx notes, explaining that providers are already adept at identifying how to support facilities-based care. In the case of the Covid-19 PHE, they took it to the next level.

“It’s about allocating your inventory and your personnel to be in lockstep with the health system and understanding where the points of patient buildup are,” he explains. “Is it in an emergency department? Is it in the acute care setting? Where in the hospital is the buildup, and what are the timelines that trigger those discharges? Then how quickly can we be feet on the street to help get that patient to the home safely so they can move another fragile patient into the hospital?”

And, of course, there was the need to help hospitals continue provisioning oxygen in the facility. There was certainly an increased use of oxygen concentrators in the hospital setting. In the case of Hometown Healthcare (hometownhealthrx.com) in Clifton Park, N.Y., local hospitals weren’t reaching the point where they felt a pressing need to get patients into a homecare setting, but they did need additional equipment on site.

“One of the things the hospitals were asking from us was, do we have equipment for the inpatient setting?” recalls Casey Toomajian, CEO of Hometown Healthcare. “Because they just didn’t know if they were going to have enough to cover the demand. So, we were providing oxygen concentrators direct to the facility, and then home vents directly to the facility as well.”

Getting back to the homecare model, Covid patients were being sent home by their physicians with oxygen equipment or were being prescribed oxygen devices even before getting to the hospital. In either case, once patients were in the homecare setting, the pandemic forced providers to reinvent delivering virtual care.

“Whether that’s educating patients on how to use their oxygen equipment or doing a full CPAP setup on Zoom, up to the point of troubleshooting equipment,” Marx says. “We perform more troubleshooting virtually now than we ever did before, and part of that is the safety factor of we don’t want to our technicians necessarily in harm’s way.

“But the other opportunity is the ability for one technician to take care of more patients and caregivers that need support in a virtual environment versus driving 30 miles each way,” he adds. “It’s just a little bit of a scalability game where we can take care of the surge of demand that we’ve received.”

A PERFECT STORM

Of course, at the same time that hospitals started relying on providers either to provide equipment for Covid-19 patients onsite or in the homecare setting, HME providers were feeling the pinch from other two other primary market forces, poor reimbursement and supply chain constraints.

Poor reimbursement represents a constant problem for HME providers as a whole, particularly with the 13 categories that CMS did not award contracts for in Round 2021. Rates on those devices have been frozen since 2016. While Medicare spending grew at a rate of 3.5 percent to $829.5 billion in 2020, DMEPOS only represents 1.35 percent of Medicare’s budget. Programs such as competitive bidding, which forced provider closures and consolidation, have undercut what has proven to be an important component of U.S. healthcare infrastructure — right when Americans needed it the most.

“The DME network has been fractured and broken for so many years because of public policy,” Marx says. “If there were more DMEs that were able to facilitate that hospital discharge and care coordination, we would free up beds faster, and hospitals wouldn’t need as many beds then because they would be turning them quicker.”

(Editor’s note: When it comes to reimbursement, the industry is seeing positive news. Turn to page 18 to read more about CMS’s final payment rule for DMEPOS, as well as nascent legislation to improve DEMPOS reimbursement.)

In addition to reimbursement, the industry is getting hit with a double-whammy of supply chain problems. First, there is the general supply chain problems that have hampered the U.S. economy due to Covid-19 related shipping and port slowdowns. Soaring shipping prices have also meant soaring equipment prices. Second, HME providers are facing product delays due to the shortages of component electronics and microchips in particular. Right now, auto manufacturers, consumer electronics companies, and medical equipment makers all rate the same when it comes to tapping into the narrowed supply of semiconductors.

“We need the government to say, ‘not everybody that gets in the deli line is created equal,’” Marx says. “You would think that products tied to the medical community that’s specifically caring for Covid patients should take priority for microchip provisioning. The same thing goes with manufacturer recalls and how the FDA helps accelerate the Phillips recall to make sure that we have an optimal supply of ventilation units and CPAP devices.”

A PERFECT OPPORTUNITY

Fortunately, the industry has seen some relief during the pandemic. The industry benefitted substantially from Covid-19 relief such as the CARES Act, the temporary pause on Medicare claims audits, and the Paycheck Protection Program, as well as a CPI-U adjustment that resulted in an average 5 percent DMEPOS fee schedule increase that started the first of the year.

However, there is much more work to be done, notes Marx, who is also the vice chair of the board of directors for the American Association for Homecare (aahomecare.org). For instance, the industry is working to extend the 75/25 blended rate for non-rural areas beyond the end of the PHE, and apply a 90/10 reimbursement rate to items in Round 2021’s 13 un-awarded categories.

“But we know that there’s so much more that has to be done as it relates to truly right-sizing the reimbursement structure,” Marx notes. “AAHomecare can do that, but we need industry-wide advocacy and engagement to make sure that we’re all rowing in the same direction, and have that scale to be heard by the federal government and all the necessary government bodies such CMS and the FDA.”

Fortunately, because of the industry’s rapid Covid-19 response, it might have some new allies. The industry has raised its profile during the public health emergency, and hospitals, health systems and other stakeholders took notice.

“I think that with the hospitals now observing what we do, more than ever we’re going to have more leverage working with the health systems to really underscore the value of homecare,” Marx says. “When they needed that hospital bed freed up, or when they need to clear out the parking lot of the emergency department, that they know who they could call. There’s only one company that they call, the DME company. I think that that is where the magnifying glass has shined the most.”

Marx says that hospitals and health organizations are truly recognizing the value of HME providers and not just seeing them as another contractor. Rather, those stakeholders are seeing that getting patients into the home helps them provide better overall care.

“We’re hearing that more than we ever heard it in the past,” Marx says. “They understand that post-acute care is not an area that they do well. … They have always known that hospice care and home health nursing have been needed. But they never understood that third leg of the stool, which is DME.”

And those stakeholders that come to rely on the value offered by HME providers should make solid allies.

“I do think that there’s more attention from the hospital system on what we do and why it matters,” Marx says. “We’re going to have to find a way to leverage that, and collaborate for that support and common advocacy over the long run.”

NEW CARE MODELS

In addition to leveraging providers’ hard work for fixes to very immediate reimbursement problems, the sorts of new care employed to get more patients in the home setting could help build a new future for home healthcare services, particularly when it comes to respiratory care.

It’s important to remember that when HME stepped in to save the day, it leveraged equipment that spells out a deeper value proposition.

“One of the things that I think could create more of that ‘hospital in the home’ model is leveraging more of the premium respiratory devices that are out there,” Toomajian says. “Leveraging their data connectivity technology, to be able to track patients that have been discharged, and look at things that would indicate if they’re stable, or if they need some sort of more support to keep them in the home and out of the hospital.

“For example, the home vent that we work with gives us information about the patient’s respiratory rate, and gives us information about how much of the machine is doing the breathing versus the patient doing the breathing,” he adds. “… That technology would allow us to not only support the patients, but if there is a problem, get ahead of that so that they don’t go back into the hospital.”

According to data from CMS, national healthcare expenditures are projected to hit 6.8 trillion in 2028. (As of 2020, they had hit $4.1 trillion, according to the agency.)

“If you look underneath the hood of what’s driving increased health costs, it’s chronic disease that’s being mismanaged,” Toomajian explains. “And then you start ranking these diseases by their biggest driver of cost, and you’ve got cardiac heart stuff at the top. COPD, I think, is in the top five in terms of driving cost, and a lot of that is just because of COPD exacerbation.”

Many of the COPD patients who can’t catch their breath to the point they must visit the hospital to get stabilized, do so on a repeat basis, setting up a very costly revolving door of admissions and discharges that could be preventable.

“We’ve had some patients that have been admitted 20 something times over a two-year period, simply because they have these preventable exacerbations,” Toomajian says.

The telehealth and remote monitoring assets that providers put in place during the Covid-19 PHE could prevent that and further cement home healthcare’s value in the patient care continuum. The question is whether or not healthcare possesses the uniform will to build that model?

Not everyone is a fan of remote monitoring for oxygen services beyond technical diagnostics. Remotely monitoring patient usage and performance data for oxygen therapy might eventually get that data tied to reimbursement in the same way sleep therapy has remote patient monitoring tied to reimbursement. That scenario for home oxygen care doesn’t come as a thrill to some folks.

“I can see people taking that view, and I respect that, because we got to pay the bills, protect fee schedules, and protect our business,” Toomajian says. “However, I see the alternative is that healthcare costs are going to continue to rise, and the health plans and CMS are going to try to need to find ways to offset those costs.”

And the way payers typically offset costs is through higher premiums and cutting reimbursement rates.

“So, in my mind it would be short-minded to not get out in front of this,” he argues. “I would like to have us as an HME community figure out how to drive value, and then work on how we get paid for lowering total cost of care.”

Obviously, a lot needs to happen to evolve care and funding models to get to that point; as it stands CMS is completely unaware of how much but how HME providers leveraged technology to rapidly respond to the Covid-19 pandemic demonstrated what’s possible.

“We had, as an industry, the opportunity to serve as an extension of the ER; to stabilize these patients at home in an urgent way,” Toomajian explains. “That was a near-term need that the industry stepped up and filled so that the hospitals could focus on their sickest patients. … When this is over, chronic disease is still going to be around.”

This article originally appeared in the Jan/Feb 2022 issue of HME Business.