Nationwide Survey Highlights Devastating Impacts of Medicare 75/25 Rate Cuts for Home Medical Equipment Industry
A nationwide survey in July 2024 reinforced the severity of Medicare FFS rate reductions in non-bid non-rural areas, triggering widespread financial pain in the HME community as they are forced to make daily decisions on whether and how they can stay afloat amidst unsustainable reimbursement pressures.
Over 100 HME suppliers participated, reporting cutting back on the products and services offered, reducing service areas, laying off staff, and/or using personal savings to keep their businesses in operation, for now. Over 1 in 10 surveyed are actively considering or planning closing their business entirely.
Survey results also demonstrate the ripple effects of these cuts beyond traditional Medicare. 86% of respondents reported that the Jan. 1 cuts led to rate reductions in other payers’ reimbursement rates, including Medicare Advantage, Medicaid, and commercial payers.
Those decisions are difficult for suppliers to make because they know the effects they will have on seniors and people with disabilities or chronic conditions, as well as family
caregivers, who depend on high quality, home-based care. The 75/25 blended rate increase that expired in January 2024 served as a lifeline for many HME companies.
Without action from Congress or CMS to restore the 75/25 blended rates, millions of Americans are threatened with diminished access to care.
In Their Own Words:
- "I have been in business 31 years, and we love our community and to serve our Medicare population, but sadly it has come to a breaking point."
- "As the owner, I have taken out personal loans to keep things going. The business has borrowed $30,000 from me, and I see no immediate way to pay myself back. I have also cut my salary to mitigate the losses. I will have to consider closing. I am only one of two DME companies in our entire county. This area would be devastated."
- "We have had to turn people away because the equipment/supplies their doctor orders cost our company more than our reimbursements."
- “Devastating. My costs have escalated, and reimbursement decreased. This is not sustainable… It is becoming impossible to stay in business. Margins are not there.”
See additional open-ended responses on the impact of these cuts from survey particapants.
CALL TO ACTION:
Tell Congress How These Cuts are Impacting Your Business and the Patients You Serve
Congress needs to understand the urgency to restore the 75/25 blended rates before the end of the year. Your passionate and persistent advocacy is critical to raising the visibility of our legislation against the volume of competing bills and political concerns on Capitol Hill.
Share the survey brief with healthcare staffers for your Senators and Representative and add your own experiences to the mix. Find additional guidance for messaging your legislators here, along with additional resources and tips.