Home Health & Hospice Week

Last-minute scrambling expected to be widespread before January reductions. Have you implemented a plan to address the 2005 oxygen cuts? If not, you're probably not alone.
 
The Centers for Medicare & Medicaid Services announced cuts of 10 to 20 percent to oxygen durable medical equipment last month (see Eli's HCW, Vol. XIII, No. 33, p. 262). But only 35 percent of home care companies responding to the American Association for Homecare's 2004 Financial Performance Survey Report started out this year with a plan for addressing the Medicare oxygen reimbursement cuts.
 
Thirty-six percent of respondents said they had "sort of" developed a plan, while another 29 percent hadn't developed a plan as of December 2003, AAH says.
 
Many providers may be hoping for a reprieve such as that called for in legislation sponsored by Reps. Dave Hobson (R-OH) and Harold E. Ford, Jr. (D-TN). H.R. 4491, with 80 cosponsors as of Sept. 30, proposes a repeal of the cuts down to Federal Employee Health Benefit Plan payment levels.
 
But that lifeboat probably won't float during this election year session, observers expect. And by next year's session, the cuts will already be in effect, although they could be repealed retroactively.
 
Fifty-eight percent of homecare firms said they plan to "significantly reengineer their oxygen order fulfillment processes" in response to the cuts, the AAH survey reports. But about three-quarters say they won't significantly reduce wages as a coping tactic.
 
Here are some benchmarks from the survey:   AR. Accounts receivable days sales outstanding in 2003 was 74 days, the survey says. That's the lowest DSO reported in five years. But "the percentage of receivables over 120 days remained high at 25 percent," AAH notes.   Growth. Industry growth averaged about 10 percent, although companies that made acquisitions grew 17 percent.   Hospitals. Hospital ownership of respondents was 28 percent. That figure is on the lower end of the 25 to 35 percent scale seen in recent years, AAH points out. 
 
Editor's Note: Information on purchasing the survey is at www.aahomecare.org.