December 27, 2017

Georgia Association of Medical Equipment Suppliers (GAMES)
3605 Sandy Plains Rd., Suite 240-470
Marietta, GA 30066

Norman Boyd, Chairman
Georgia Board of Community Health
Post Office Box 38406
Atlanta, Georgia 30334

Via email: danwilliams@dch.ga.gov

Dear Mr. Boyd,

The Georgia Association of Medical Equipment Suppliers (GAMES) is a proactive, state-wide association providing leadership, resources and support to companies that provide medical equipment supplies and services to patients in their homes. Our mission is to facilitate business success, influence public policy, and improve patient care in the home.

The GAMES Board of Directors (hereafter referred to as GAMES) has reviewed the "Department of Community Health, Medical Assistance Plans, State Plan Amendment: Durable Medical Equipment (DME) Proposed Rate Change per the 21st Century Cures Act” (hereafter referred to as state amendment) and would like to offer the following comments.

The GAMES Board recommends that the state should not implement the proposed amendment. We believe implementing this amendment would cause tremendous access to care issues for the state’s Medicaid population. It is also dually noted that compliance with this legislation (Cures) does not require a change to the Georgia Medicaid Fee Schedule.

The Medicare Bid Rates are based on a flawed system. 37% of Georgia’s DME Providers have already gone out of business:

In June of 2011, 244 economists, computer scientists, and engineers from top universities across the country, including four Nobel laureates, wrote the White House warning that continued implementation of the competitive bidding program would lead to market failure and thereby deny senior’s access to this critical healthcare benefit while increasing healthcare costs. (reference: Cramton Hidden Costs)

Under these flawed and unsustainable Medicare rates, Georgia has seen 37% of DME locations closed since 2013. Additionally, 5 providers representing 8 individual locations closed their doors in the 4th quarter of 2017 alone. To further harm DME providers by applying these rates to State Medicaid, is the first step in an even more costly downward spiral in providers. These rates will lead to additional closures and patient access issues, especially in underserved rural areas.

The Department may not have had access to complete information when computing the potential shortfall to the state budget:

On December 1, 2017, the department reached out to GAMES to schedule a meeting for discussion regarding pricing changes due to implementation of the 21st Century Cures Act. CMS still had not issued official guidance that would be forthcoming in a State Medicaid Directors letter. CMS gave a preliminary webinar regarding the potential guidance to gather comments and questions from the state Medicaid programs. This webinar was only preliminary and did not include the list of HCPCS codes included in this legislation. This webinar was not held until 1:00 PM EST on December 7, 2017 which is after the meeting request with GAMES and after the Department of Community Health Board of Directors meeting where this issue was voted on. The HCPCS list was provided to the department on December 18, 2017 by GAMES Board member and Vice President of Payer Relations of the American Association for Home Care who has been working directly with CMS to obtain clarification and guidance for the states and the HME industry. Due to this piece of information not being provided at the time of analysis and vote by the board, the budget analysis provided by the Department is inaccurate. The Department also was not aware that the comparison of rates between Medicare and Medicaid be completed in the aggregate for all codes on the list. So items priced by Georgia Medicaid below Medicare allowable such as ventilators will make up some of the budget shortfall in determining the appropriate Federal Financial Participation match. (reference: AAH Cures summary)

The Medicaid Population is vastly different from the Medicare Population:

Unlike the Medicare population which is made up of those 65 and older, Ga Medicaid covers all age groups. Those disproportionately affected by the adoption of these rates will be pediatrics. The Pediatric population which primarily uses nebulizers to combat respiratory infections will surely see access issues under these rates. This will cause a significant cost shift towards Emergency Room visits and potential hospitalizations as pediatric beneficiaries will not have access to preventative equipment such as nebulizers. (reference: State Briefing on Medicare Rate Adoption February 2017)

The 21st Century Cures Act does not require States to adopt Medicare Rates:

This was clarified during the webinar hosted by CMS. In fact, the Social Security Act, § 1396a(a)(30)(A) contains a broad directive that a state Medicaid Program must "provide such methods and procedures relating to the . . . payment for . . . care and services available under the plan . . . as may be necessary . . . to assure that 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.” Again, states do not have to do anything with their payment rates to be in compliance with this legislation other than submit reconciliation data by 3/30/19. (reference: Legal Opinion on Cures, Brown & Fortunato, P.C.)

The Medicare Payment rates published by CMS for 1/1/2018 are uncertain due to the Federal legislative landscape:

In December 2013, the 21st Century Cures Act also mandated that the Medicare CMS fee schedule for July 1, 2016 be RETROACTIVELY changed to eliminate cuts that occurred with that fee schedule. The legislative language required the fee schedule for 7/1/16 through 12/31/16 be retroactively changed and that the Medicare Administrative Contractors reprocess all claims at the higher fee schedule.

Currently there are two items being worked on at CMS and legislatively with Congress that will create this same situation, therefore requiring the state if adopting their rates to follow Medicare pricing to reprocess claims.

1. There is an Interim Final Rule published in the Office of Medicare and Budget (OMB) to retroactively change the fee schedule for 8/1/17 through 12/31/17 to eliminate the rate cuts that occurred in 2017 and ongoing into 2018. This would make the 1/1/2018 fee schedule published by CMS that will be used for reconciliation null and void.

2. HR 4229-Protecting HOME Access Act of 2017 has been introduced by Representative Cathy McMorris Rodgers that currently has 96 co-sponsors in the House of Representatives. This piece of legislation will retroactively change the fee schedule beginning 1/1/2017 through 12/31/18 again making the 1/1/2018 fee schedule published by CMS that will be used for reconciliation null and void.

Due to this, the Department is uncertain to which rates the reconciliation will be implemented against.

An independent National Study shows 52% of Medicare beneficiaries experienced access issues after implementation of Medicare Bidding:

The study was completed by Dobson Davanzo, LLC and was a survey completed by 428 patients and 358 case managers. This study also showed that 89% of case managers reported an inability to obtain DME in a timely fashion creating delayed discharges from hospitals, admissions to skilled facilities in lieu of patients’ homes, or discharges without appropriate medical equipment leading to readmissions or hospital ER visits. A similar peer review study completed by the American Thoracic Society showed similar results of 51% of respondents reported problems in accessing oxygen, DME, and services. This article was published in the Annals of the American Thoracic Society.

These are the same rates that the Department is looking to implement for Medicaid beneficiaries in Georgia. With the data received in these studies, it is safe to assume that the same access issues will occur with Georgia Medicaid beneficiaries. (reference: HME Access Study Executive Summary, HME Access Study Highlights, and Independent Surveys Point to Consistent Patient Issues 12.17)

An independent Cost Study shows that only 88% of medical equipment providers costs are covered by Medicare Competitive Bidding Rates:

This study was conducted by Dobson Davanzo, LLC that compared the cost of providing medical equipment services to Medicare rates showed that small local providers and large national providers all lost 12% overall on medical equipment services. Providers cannot sustain businesses on a 12% loss which has created 42% of HME companies nationwide to go out of business or closed due to consolidation since July 2013. As stated above 37% of Georgia HME providers were impacted creating a lack of providers in many rural areas. (reference: DME Cost Study, Dobson Davanzo)

In conclusion, GAMES strongly urges the state to delay the implementation of this fee schedule to allow time for a full scale analysis of effects these rates would have on the already strained DME network.

Sincerely,

Teresa Tatum
Executive Director
Georgia Association of Medical Equipment Suppliers (GAMES)
Ph: 770-516-3329
Email: teresa@gameshme.org

The GAMES Board of Directors

Tyler Riddle, President
M.R.S. Homecare, Inc.
Albany, GA

Charles Barnes IV, President Elect
Barnes Healthcare Services
Valdosta, GA

Jeremy Killough, Secretary
Southeastern Home Oxygen Services
Columbus, GA

Chad McCrickard, Treasurer
Petsch Respiratory Services
Martinez, GA

Carl Roan
Soft Touch Medical
Marietta, GA

Bill Boyce
Numotion
Norcross, GA

Craig McCook
Aerocare / Georgia Home Medical
Albany, GA

Christa Forrester
Airgas
Atlanta, GA

Laura Willard
American Association for Homecare
Washington, DC

John Storie
Pride Mobility Products
Smyrna, GA