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The American Association for Homecare today released a briefing paper designed to assist home medical equipment leaders nationwide in their efforts to engage state Medicaid directors on future Medicaid rate-setting deliberations involving home medical equipment.   The new briefing paper, States Should Not Accept Flawed Medicare Rates, has been developed in the wake of new provisions in 21st Century Cures legislation (CURES) that will begin limiting the federal contribution for home medical equipment to state Medicaid programs to the Medicare rates in effect starting January 1, 2018.

The briefing paper notes the unsustainable reimbursement rates facing providers operating under competitive bidding program-derived Medicare pricing and provides important perspectives on the problems with applying these state Medicaid programs.  In particular, the paper focuses its arguments on these four core areas: 1) the distinct patient populations and differing missions of Medicare vs. state Medicaid programs; 2) the defective and unsustainable Medicare bidding program; 3) major differences in reimbursement structure between the two programs; and, 4) significant geographic variances in patient populations that Medicare rates do not adequately account for.

“Home medical equipment providers serving Medicaid patients take great pride in helping individuals who often struggle to receive quality healthcare,” said Tom Ryan, president & CEO of the American Association for Homecare.  “However, if states simply allow Medicaid rates to drop in lockstep with Medicare reimbursement rates when the provisions in the CURES bill take effect next year, many providers are going to find it difficult to remain in Medicaid programs.”

“AAHomecare looks forward to supporting state home medical association leaders and other stakeholders as they make the case for sustainable Medicaid rates,” continued Ryan.  “These efforts are another example of our increasing involvement addressing payer and reimbursement rates outside the Medicare space.”

“As state budgets are already being put together for 2018, we felt we needed be proactive in both examining the Federal legislative and regulatory language covering Medicaid as well as in developing resources that providers, state associations, and state Medicaid directors can use in working together to establish sustainable reimbursement rates,” said Laura Williard, AAHomecare’s senior director of payer relations.  “We want to make sure that all parties involved have a clear understanding of the facts and opportunities related to this issue – when that happens, states have a much better chance of formulating Medicaid policy that benefits providers, state budgets, and patients.”

AAHomecare’s briefing paper also states that “there is no federal requirement for a state Medicaid program to tie its payment limits to Medicare rates,” and are, in fact, directed to set their own rates as needed to maintain beneficiary access and a sufficient number of participating providers.  The statutory language underpinning these finding on state rate-setting flexibility was confirmed by leading healthcare reimbursement experts.

AAHomecare’s full summary can be found here.  Home medical equipment providers seeking additional information on this summary and the Association’s payer relations activities can contact Laura Williard at


Gordon Barnes - - 202-372.0759