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Congress Must Recognize Homecare as Cost-Effective Part of Health Care Reform

Statement by Tyler Wilson, President and CEO, the American Association for Homecare

ARLINGTON, Va., July 20 /PRNewswire-USNewswire/ -- In their effort to find savings in the healthcare system, the Obama administration and Members of Congress have been eyeing Medicare's home medical equipment (HME) sector for cuts. This sector provides medical oxygen, respiratory therapy, hospital beds, wheelchairs, walkers and other equipment and services that allow people to get the care they need at home instead of in a hospital or nursing home.

Already in 2009, Medicare payments for the most commonly prescribed home medical equipment categories have been cut by 9.5 percent. Medical oxygen reimbursement has been cut by 27 percent so far this year. Another measure aimed at cutting HME costs further is so-called "competitive" bidding.

"The American Association for Homecare urges Congress to recognize that home care is a cost-effective alternative to more expensive forms of care, and should therefore be a critical component -- not a casualty -- of American health care reform. Current and proposed cuts to Medicare's home medical equipment sector are not an effective way to reduce overall Medicare spending. These cuts are likely to increase Medicare costs over time by forcing more seniors into nursing homes and hospitals, blocking preventative care, and causing more frequent visits to emergency rooms.

"Quality home medical equipment and services facilitate hospital discharges, reduce hospital readmissions and emergency room visits, and help to keep seniors and people with disabilities out of more expensive institutional settings. As Congress debates health care reforms, it is important that it keeps these facts in mind and recognizes home care as a partner in improving the quality of American health care and reducing overall health care costs.

"Most home medical equipment costs just dollars a day. The cost of providing the equipment and service for home oxygen, for example, is less than $7 per day under Medicare. Compare that to the average daily cost of about $200 for a nursing facility and more than $5,000 per day for a hospital stay under Medicare.

"According to a recent study in the New England Journal of Medicine, up to one-fifth of all Medicare patients are readmitted to hospitals within one month of being discharged. These unplanned visits cost Medicare an estimated $17 billion in 2004. One reason for the high readmission rates is the lack of continued interaction and guidance once patients are dismissed. Home medical equipment providers help to fill this gap by smoothing the transition from hospital to home with the equipment and services patients need.

"This year, Medicare payments for the most commonly prescribed home medical equipment categories have been cut by 9.5 percent, including complex rehabilitative power wheelchairs. Medical oxygen reimbursement has also been cut by 27 percent so far this year. Home oxygen is a critical, life-sustaining medical treatment prescribed to nearly 1.5 million Medicare patients each year who suffer from respiratory illnesses such as chronic obstructive pulmonary disease.

"Another measure aimed at cutting HME costs further has been labeled 'competitive' acquisition. A regulation enacted in the final hours of the Bush administration would selectively contract with a small number of home care providers based on a race to bid the lowest payment. Even among those who agree to new bid-determined payment rates, Medicare only allows a select few to provide the items, which will have the long-term result of reducing the number of companies competing to offer home care products.

"These cuts in reimbursement are having a negative impact on the quality of equipment and the level of services that providers are able to furnish to consumers who have severe disabilities and who are in greatest need of mobility products and services.

"Home medical equipment and service is already the most cost-effective slowest-growing portion of Medicare spending, increasing only 0.75 percent per year, according to the latest National Health Expenditures data from Medicare. That compares to more than 6 percent annual growth for Medicare spending overall. Moreover, home medical equipment represents only 1.6 percent of the Medicare budget.

"As Congress deliberates cuts to Medicare, they would do well to recognize that cuts to home medical equipment will increase long-term Medicare costs. The home medical equipment sector should be seen as a key element in reducing overall Medicare costs."

The American Association for Homecare represents durable medical equipment providers, manufacturers, and other organizations in the homecare community. Members serve the medical needs of millions of Americans who require oxygen equipment and therapy, mobility assistive technologies, medical supplies, inhalation drug therapy, home infusion, and other medical equipment and services in their homes. The Association's members operate more than 3,000 homecare locations in all 50 states. Visit

SOURCE American Association for Homecare
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