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.=20
Ralph W. Nobbe, CPO
—–Original Message—–
From: Orthotics and Prosthetics List [mailto:[email protected]] On Behalf Of [email protected]
Sent: Wednesday, June 16, 2004 8:09 PM
To: [email protected]
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.
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