WHAT YOU NEED TO KNOW ABOUT YOUR MEDICARE BENEFITS

PROTECT YOUR HOME MEDICAL EQUIPMENT BENEFITS Dear Medicare beneficiary: Please help us protect your Home Medical Equipment (HME) benefit and services. Since 2008 Medicare has been implementing cuts, regulation and process changes designed to reduce the amount of money it spends each year on beneficiary care. Since that time all other spending sources (hospitals, physicians, clinics, home health, and prescription) have continued to grow, but the HME industry has been decimated. On January 1, 2016 Medicare initiated another drastic reduction in reimbursement for all HME. Another significant cut went into effect on July 1, 2016, reducing reimbursement rates by nearly 60% for some items. The initial cuts have had a devastating effect on many equipment providers, and we are concerned that the government has not taken adequate time to evaluate the potential negative impact of these cuts on continued access to quality products and services for Medicare beneficiaries like you. With these reimbursement cuts taking place on July 1st, we are no longer able to provide you with the level of service that has always exceeded Medicare requirements and has become commonplace for our organization. Here are a few of the “above & beyond Medicare requirements” services we provide today:  Coordination of services with hospital discharge planners and physician offices  Provision of services when you request them as opposed to on a set schedule  Home oxygen to rural areas  Home medical equipment to rural areas  Home medical equipment to areas located more than 30 miles from our branch location  Off-cycle deliveries of portable oxygen  Accepting your Medicare and/or coinsurance as payment in full (Medicare assignment for noncompetitive bid areas) How can you help? You can help by calling your United States Senators and your Congressional Representative and telling them to repeal the cuts that took place on July 1, 2016 and demand Medicare change its current course of actions on the HME industry. You can also visit the Council for Quality Respiratory Care (CQRC) website at www.cqrc.org and click on the “Take Action Now” button. You can also visit the American Association for Homecare website at action.aahomecare.org to submit your concerns to Washington D.C. through their online portals and petitions. Please, do not wait. These are your benefits. Contact your Senators and/or Representative today. We want to be able to continue to provide the quality products and services that you deserve and have come to know from ABC Health Care; however, Medicare has forced us (and all other HME providers) to make a choice, “Do you want to provide great customer service or stay in business?” Without your help Medicare is making that decision for us and we are being forced to severely reduce the high quality service you receive today. Thank you, ABC Health Care

ABC Health Care  Phone: (866) 363-3678  Fax: (757) 826-9269  www.abc-hc.com

U.S. Senators: Virginia Sen. Tim Kaine (D VA) Washington Office 231 Russell Senate Office Building Washington, D.C. 20510 Telephone: 202-224-4024

Sen. Mark Warner (D VA) Washington Office 475 Russell Senate Office Building Washington, D.C. 20510 Telephone: 202-224-2023

U.S. House Delegation: Virginia Rep. Robert J. Wittman (R VA-1) Washington Office 2454 Rayburn House Office Building Washington, D.C. 20515 Telephone: 202-225-4261

Rep. Dave Brat (VA-7) Washington Office 330 Cannon House Office Building Washington, D.C. 20515 Telephone: 202-225-2815

Rep. Scott Rigell (R VA-2) Washington Office 418 Cannon House Office Building Washington, D.C. 20515 Telephone: 202-225-4215

Rep. Don Beyer (VA-8) Washington Office 431 Cannon House Office Building Washington, D.C. Telephone: 202-225-4376

Rep. Robert C. Scott (D VA-3) Washington Office 1201 Longworth House Office Building Washington, D.C. 20515 Telephone: 202-225-8351

Rep. Morgan Griffith (R VA-9) Washington Office 1108 Longworth House Office Building Washington, D.C. 20515 Telephone: 202-225-3861

Rep. J. Randy Forbes (R VA-4) Washington Office 2135 Rayburn House Office Building Washington, D.C. 20515 Telephone: 202-225-6365

Rep. Barbara Comstock (VA-10) Washington Office 226 Cannon House Office Building Washington, D.C. Telephone: 202-225-5136

Rep. Robert Hurt (R VA-5) Washington Office 125 Cannon House Office Building Washington, D.C. 20515 Telephone: 202-225-4711

Rep. Gerry Connolly (D VA-11) Washington Office 2238 Rayburn House Office Building Washington, D.C. 20515 Telephone: 202-225-1492

Rep. Bob Goodlatte (R VA-6) Washington Office 2309 Rayburn House Office Building Washington, D.C. 20515 Telephone: 202-225-5431

ABC Health Care  Phone: (866) 363-3678  Fax: (757) 826-9269  www.abc-hc.com

Durable Medical Equipment (DME) Represents Approximately 1.3% of Medicare Spending

Medicare Expenditures (2000-2013)

Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group

Medicare Needs Cost-Effective Solutions Medicare expenditures continue to rise in spite of flat lined DME spending. It is critical that cost-effective home and community based services are strengthened and protected as our nation prepares for the senior tsunami. •

Overall Medicare spending increased over 160% from 2000-2013.

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On the contrary, DME spending has only grown 2.7% in the past 5 years and actually declined 4.8% between 2012 and 2013.

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DME as a percent of Medicare spending has declined for 10 years from 2.1% in 2003 to 1.3% ($7.7 billion) of the Medicare budget in 2013.1

Investing in DME Saves Medicare Overall DME, like wheelchairs, oxygen, and feeding tubes, enables millions of Americans with disabilities and chronic illnesses to remain safe and independent at home. It is an essential cost benefit tool to keeping the overall costs of health care down. The more that people receive quality equipment and services at home, the less that is spent on hospital stays, emergency room visits, and nursing home admissions.2 •

Oxygen therapy can be provided for one year for the cost of one day’s stay in the hospital

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For every dollar spent…. •

$1 spent on mobility DME saves $16.78 in fall-related recovery.

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$1 spent on supplemental O2 therapy for COPD saves $9.62 in complications.

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$1 spent on CPAP therapy saves $6.73 in Obstructive Sleep Apnea complications.3

15.5 million Medicare beneficiaries use home medical equipment, and the number is expected to grow dramatically with the aging boomer population. It is important that we provide these beneficiaries with cost-effective home care options that are patient preferred and result in better clinical outcomes. Join us in preserving this important safety net for caring for our medically frail seniors and people with disabilities. Homecare is part of the solution to our nation’s health care crisis, and it is imperative that Congress protects this valuable benefit to contain costs and provide better health outcomes. Sources: 1. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/NationalHealthExpendData/nationalHealthAccountsHistorical.html 2. MPP Testimony before the House Ways & Means Health SubCommittee, Joel Marx. 5/9/12. 3. “The Case for Medicare Investment in DME—2014 Update”, Brian Leitten. http://www.vgmdclink.com/uploads/library/d1306dfcd9db67830ba14d4cd5b3be8c.pdf

Evaluating CMS’ Outcomes Data Analysis For DMEPOS Competitive Bidding The Centers for Medicare and Medicaid Services (CMS) released information in June 2016 stating that it has not detected negative health outcomes or beneficiary access issues in response to the nationwide expansion of applying rates derived from the Competitive Bidding Program in the largest 100 metropolitan areas to rural and non-bid areas beginning January 1, 2016.

KEY QUESTIONS However, the data CMS used to determine these outcomes is incomplete, raising several key questions.

Dates of Observation Claims data observation period is January 2015-April 2016, and data was pulled on May 6, 2016. Claims data for January 2016 to April 2016 is incomplete since all providers have 1 year to submit claims. CMS recognizes the claims data is incomplete and states in the methodology “Rates in the most recent months may not be complete yet due to claim delay.” This is not publicized beyond the methodology section. CMS recognizes this timeframe is not all inclusive in their own Innovation Models. In the Innovation Models, CMS completes the first reconciliation period 6 months after the ending date of the timeframe. They also complete 3 additional “True Up Reconciliation Periods” over the course of 9 additional months. In the Innovation Models, CMS recognizes this delay and allows 15 months to ensure all claims data has been submitted. Many claims for all provider types are now subject to prepay audits where there will be no claims data for many months/years. In addition, many hospitals have settled large volumes of audits that are termed “dismissed” and never populate to claims data to be compared to utilization patterns. • What percentage of claims come in beyond 120 days for each of the following Claim Types: o Inpatient Admissions (IP) o Physician Visit o ER Visit o Skilled Nursing Facility (SNF) Admissions • Why would only SNF claims be excluded for April? There is a footnote that SNF data experiences longer delays historically so therefore April’s data for SNF claims are not included in this update.

Types of Data Included/Excluded CMS only included a portion of the pertinent and relevant data in its evaluation of the impact of the program. • Why would inpatient data only evaluate based on readmissions to the hospital? Access to DME usually occurs from these original admissions. A more accurate picture would be to evaluate the readmissions for patients with DME. • Has CMS monitored the percent of DME utilization for the access and utilizer beneficiary groups? There are two views based on access and utilizers. Access is patients with specific diagnoses. Utilizer Group are patients with those diagnoses who actually received a Competitive Bid Item. • Why did CMS exclude some of the covered diagnoses in its evaluation? o Why did CMS only evaluate a cancer diagnosis for infusion pumps? Data on inotropic, antifungal, and antiviral have not been evaluated. American Association for Homecare 1707 L Street NW, Suite 350 Washington, D.C. 20036 202.372.0107 www.aahomecare.org

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Why did CMS only evaluate 10 out of 216 ICD10 codes of covered diagnoses for Insulin pumps in the LCD? Example of excluded diagnoses: Diabetes due to underlying condition with chronic kidney disease. Why did CMS only evaluate 31 out of 194 ICD10 codes of covered diagnoses for nebulizers in the LCD?

HISTORICAL ISSUES The information CMS used to monitor beneficiary impact of the nationwide expansion of the bid is incomplete and insufficient to make broad assessments on the impact of beneficiary health outcomes and access to DME. However, 2015 historical information from CMS comparing Competitive Bidding Areas (CBAs) to non-bid areas highlights concerning adverse effects from Medicare beneficiaries under the Competitive Bidding Program.

Competitively Bid Areas (CBAs) to Non-CBAs Medicare beneficiaries in CBAs had higher rates of visiting physicians and longer lengths of stays in hospitals than their non-bid counterparts. • 3.3% higher rate of beneficiaries receiving at least one physician visit in CBAs vs non-CBAs. Many providers eliminated clinical visits with rate cuts in CBAs, which is increases utilization of physician visits in CBAs. • On average, Medicare beneficiaries stayed in hospitals 7.6 days in CBAs vs 6.8 days in non-CBAs. The timeframe for discharge from the hospital is longer in bid areas due to the complexity of the program and coordination of multiple suppliers involved. Rural areas will see the same effects with continued reduction in rates.

Beneficiaries Using Oxygen Therapy Access to Oxygen therapy plays an important role in preventing ER visits, death, hospitalization, and extended stays in the hospital when admitted. Based on the “Access Group” and “User Group” of Medicare beneficiaries with home Oxygen therapy, those who resided in CBAs were less likely than their non-bid counterparts to have access to medically necessary home Oxygen therapy. Proper access to oxygen: • Decreases ER visits by 1.4% (9.2% Access vs 7.8% User) • Decreases death percentages by .7% (2.2% Access vs 1.5% User) • Decreases percent of hospitalized beneficiaries by 2% (10.6% Access vs 8.6% User) • Decreases the number of days hospitalized by .5 days (7.5 Days Access vs 7 Days User)

SUMMARY Congress must have additional information before being able to determine the impact of beneficiary health outcomes and access to medically necessary DME as result of the expansion of the Competitive Bidding program into rural and non-bid America. Past experience with the Competitive Bidding Program demonstrated negative outcomes for beneficiaries in Competitively Bid Areas, and there is not enough data from 2016 to properly evaluate the impact. Congress must pass the Patient Access to Durable Medical Equipment Act of 2016 legislation before July 1, 2016 to extend the transition period of the bid program expansion and allow Congress enough time to evaluate the program’s impact.

06/09/16

American Association for Homecare 1707 L Street NW, Suite 350 Washington, D.C. 20036 202.372.0107 www.aahomecare.org