A key medical equipment company has decided to continue serving Vermont Medicaid customers, reversing a decision that would have left thousands searching for a new supplier.
The Department of Vermont Health Access announced Friday that Keene Medical Products “will remain a full member of the Vermont Medicaid provider network” as the result of negotiations with the company.
In late April, Keene Medical notified Vermont Medicaid beneficiaries that it was withdrawing from the market on June 1 due to reductions in state reimbursement. Subsequent talks, as well as the state modifying some of its reimbursement rates, led company administrators to change their minds.
“In the end, I’m really grateful that we found a way to keep Keene Medical products in the Vermont Medicaid system,” said Michael Costa, the department’s deputy commissioner.
Kurt Filiault, Keene Medical’s chief executive officer, added that “our dialogue with (the department) over the last few weeks has been positive and has given us confidence that our business model can continue to succeed.”
The issue arose because the Department of Vermont Health Access, which manages the state’s publicly funded health insurance programs, changed its reimbursement policies earlier this year for so-called “durable medical equipment.”
That’s a term used to describe equipment that meets a therapeutic need because of medical conditions. Examples include hospital beds, walkers and commodes, along with a wide variety of other devices.
Costa said some medical equipment products were set for a higher Medicaid reimbursement, while some reimbursements were reduced. The department “tried to get its fee schedule aligned with recent changes in federal law,” he said.
In certain cases, the changes were significant. Some cuts “were in excess of 50 percent,” Filiault said.
State officials said they consulted with the Home Medical Equipment and Services Association of New England, a Massachusetts-based trade group, before making the changes and have continued that dialog since.
“We’ve been making commonsense adjustments along the way,” Costa said.
But in late April, Keene Medical sent a letter to customers saying it would stop Vermont Medicaid service “due to drastic and unsustainable reimbursement cuts.” The letter said company administrators “regret that we have been forced to take this action” and urged customers to contact Gov. Phil Scott or Vermont Legal Aid.
Mike Fisher, Vermont’s chief health care advocate, said his office received “many calls” from concerned residents.
“Our chief concern is that people have access to providers,” Fisher said. “These are a set of Vermonters who are in many cases very vulnerable with a tremendous amount on their plates. It was very unfortunate that these families were swept up in this controversy.”
Keene Medical’s withdrawal would have had a major impact. The Enfield, New Hampshire-based company maintains six offices throughout Vermont and serves 4,000 Medicaid beneficiaries in the state.
Keene Medical is far from the only medical-equipment provider in Vermont: State officials say there are 180 others. But it is key player in the market and, in some areas, Keene Medical may be the only available supplier.
“We are really sensitive to the geographic issue of making sure that people have what they need in a rural state,” Costa said.
So state officials engaged in talks with Keene Medical and other equipment providers. The state “was very interested in assuring that no accessibility issues would be generated by our elimination of products and services,” Filiault said. “They negotiated very candidly and transparently.”
Costa said Keene Medical’s April letter “made us focus on what we needed to do and what adjustments we needed to make.”
But he stressed that the state’s reimbursement changes apply to all equipment providers – not just Keene Medical. And he said some of those changes had been under consideration for many months.
For example, the department has decided to reimburse for both equipment and related supplies – something that hasn’t been happening.
Filiault said “all of the concessions the state made were in the best interest of their provider network and beneficiaries to avoid real access issues.”
Friday’s announcement of an agreement between Keene Medical and the state was met with relief.
Fisher said it is “really good news that they found a compromise.” And the state’s announcement included a statement from North Country Hospital Interim Chief Executive Officer Tom Frank, who said “high quality rural health care relies on access to durable medical equipment, and a robust provider network is the key to providing that access.”
“Keene is an important member of that network, so we’re relieved that this collaboration will continue,” Frank said.
State officials also said that they’re collaborating with Keene Medical on an outreach program, “notifying members by phone and mail that Keene’s services will continue.”
While Keene Medical has committed to sticking with Vermont Medicaid, Filiault said larger problems still remain for his company and his industry.
Filiault said medical equipment providers facilitate a patient’s transition from hospital to home. But he said some are closing their doors due to reimbursement issues with the Centers for Medicare and Medicaid Services, also known as CMS.
The cuts recently enacted by the state “have been applied by a number of commercial insurance carriers as well,” Filiault said. “The cuts follow a flawed CMS design which CMS has recently themselves acknowledged and corrected. Keene will be pursuing talks with commercial insurance companies as well in the near future.”