Climate, tax advantages and a strong health care infrastructure have been bringing people to Florida for decades. As the state’s population growth — the second-highest in the nation over the last year — remains strong, the budget for social services, especially state-funded health care costs, goes up as well. A rapidly growing senior cohort adds to the costs.
In Florida, nearly one in five individuals are covered by the state’s Medicaid program. Medicaid enrollees in the state topped 5 million for the first time in October. By last month, an additional 105,000 individuals had been added.
Florida’s Agency for Health Care Administration requested $36 billion to serve this population for the 2022 fiscal year. The care is essential, but the costs are significant — and still growing.
What does this mean for Florida’s future? We must start putting in place guardrails for our state’s health care infrastructure today. This requires a careful examination of our state’s demographics and enacting policies that prepare our communities for the changing population’s needs.
One approach to help slow the growth of health care costs is through investing in our capability to deliver high-quality, home-based care. Home medical equipment companies provide a range of essential products used by seniors, including oxygen, ventilators, devices to prevent sleep apnea, wheelchairs, catheters, specialized beds and diabetic supplies.
These products help reduce hospital visits and allow seniors, people with disabilities and individuals with chronic conditions the chance to stay in their homes longer. The result is not only greater independence and the ability to remain a part of their communities, but also a decrease in the utilization of more costly modes of care.
The value of homecare has never been clearer than during the pandemic, when home medical equipment providers cared for patients against the headwinds of strained supply chains, staffing shortages, increased shipping charges and a rising number of patients due to overburdened hospitals and apprehension toward nursing homes.
Price increases for equipment and other increased operational costs add to the burden on home medical equipment suppliers. Many of these challenges and higher costs are likely to remain for a long time even as the pandemic begins to fade.
So how can homecare providers build in these rising costs to stay in business? They can’t. While most businesses pass along increased costs to consumers, rates for home medical equipment and supplies for Medicare and Medicaid beneficiaries are set by federal and state agencies. Most private insurers follow suit by pegging their reimbursements to Medicare and Medicaid rates. Adding to the challenges for home medical equipment providers is the major role played by managed care organizations in Florida.
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Managed care organizations administer care for nearly 80 percent of the state’s Medicaid enrollees, so their influence on health care providers serving this cohort is tremendous. Managed care organizations often reimburse at less than half of the current Medicaid fee schedule for home medical equipment and related services. Providers may receive even less if a third-party administrator is involved.
Together these factors could put many homecare companies out of business. Hospitals, clinicians and nursing homes will face greater strain caring for these patients if strong access to home-based alternatives isn’t widely available.
The prospect of not being able to provide home-based care for an aging Florida population should raise alarm bells for health care leaders, family caregivers, senior advocates and policymakers alike. Shoring up our state’s homecare infrastructure should be a priority in this legislative session.
Supporting home medical equipment providers with sustainable Medicaid reimbursement rates is an important part of protecting home-based care. There are currently bills in both Florida legislative chambers, HB 1165 and SB 1540, that would require Medicaid managed care organizations to pay home medical equipment providers 100 percent of the Medicaid fee schedule for equipment that helps keep patients at home instead of a hospital.
Ensuring that managed care organizations cannot set rates for Medicaid beneficiaries below the state’s Medicaid fee for service rates is critical to the home medical equipment industry and the health care infrastructure for Florida.
Cost-effective, patient-preferred home-based care is critical to meeting the needs of Florida’s growing population of Medicaid beneficiaries. An investment in sustainable reimbursement policy for home medical equipment suppliers will strengthen our ability to serve the needs of Floridians today and in the future.
Crispin Teufel is CEO of Lincare Holding Inc., a leading supplier of respiratory-therapy products and services for patients in the home with headquarters in Clearwater.
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