Home Health & Hospice Week

Medicaid changes how nursing homes pay for equipment.

If you're a durable medical equipment supplier serving Louisiana, expect to see fewer orders for custom wheelchairs.

The Louisiana Department of Health & Hospitals has enacted a new rule requiring nursing homes to foot the bill for patients' customized wheelchairs and other medical equipment in exchange for higher Medicaid rates - a move that's expected to reduce custom wheelchair use while saving the state an estimated $8.5 million.

Under the previous system, nursing homes were responsible for providing standard wheelchairs to residents who needed them and paying for the equipment out of their daily Medicaid rates. But if a resident needed a customized chair, the state would buy the device directly from a DME supplier.

Because facilities had to pay for standard chairs but not customized ones, they had "an incentive from the start to order a custom chair," DHH Secretary Fred Cerise told a state legislative panel earlier this month.

When residents died, the chairs would go to their families rather than the nursing home or equipment dealer. As a result, the state sometimes ended up paying thousands of dollars for custom equipment that got only a few weeks or months of use.

CMS Sought the New Policy

Louisiana is one of only a handful of states that pay separately for DME instead of including its cost in the rate paid to nursing homes. The state revamped its policy at the urging of the Centers for Medicare & Medicaid Services, which is seeking ways to control runaway Medicaid spending.

Customized chairs cost Louisiana $14 million in the fiscal year that ended June 30, the Associated Press reports. In comparison, New Mexico spent just $46,000 on custom wheelchairs last year, even though it's among the states that don't require nursing homes to pay for the devices.

Louisiana's new rule took effect July 20. To cover nursing homes' cost of supplying the equipment, the state hiked the daily rates paid to facilities by 92 cents per patient. The nursing home industry has protested the policy, arguing that it would hurt them financially, but DME suppliers say they welcome the change.

"This is going to stop some dealers from selling custom wheelchairs," acknowledges Rivers Breedlove, marketing director for Red Ball Medical Supply in Shreveport, LA. "But they were doing custom chairs for people who didn't need them anyway. [The change] doesn't bother me at all because we don't operate that way."