By Bill Britt
Alabama Political Reporter
MONTGOMERY—Imagine it’s the middle of the night. A call goes out that a homebound, 75 year-old woman, living in a rural county is in desperate need of oxygen. Her doctor says she can’t live without it, her insurance will pay for it and the medical equipment provider will deliver it, even though it may cost them more money than they will make.
Many similar scenarios play out every day for the sick and dying in Alabama, who depend on Durable Medical Equipment (DME) providers, homehealth nurses, and those who offer hospice care.
Those who deliver these life-saving products and services are subject to strict Federal and State government regulations, including how they are paid, what they can charge and how they conduct business.
For example: when a doctor writes a prescription for oxygen and their is no one in that location to fulfill the order for the patient, he will call a provider such as a DME owner in a different county. That sounds simple, but here’s the problem: When the DME provider crosses from its primary business location into another county, they are required to purchase a business license for that specific city, town or county. They may only service that patient once, but they must still purchase a business license for that location. Unlike a commercial retailer like an appliance store, the DME cannot by law charge a delivery fee.
While those who offer such equipment and services have a business license for their primary business location, outside counties and municipalities are requiring licenses and levying fines on these companies for doing business.
“They have no control…and the cities are gouging the devil out of them,” said Rep. Johnson.
Rep. Ron Johnson, (D-Sylacauga) and Senator Jabo Waggoner, (R- Vestavia Hills) want to fix this problem which Johnson says harms lives and has the potential of bankrupting those who provide such patient care.
HB185 and SB237 would stipulate that companies and employees who provide these healthcare needs would only be required to maintain licenses in the municipality or county at which its headquarters or branch offices are located.
Peter Czapla, whose company, Quality Homes Healthcare, Inc., supplies home medical equipment says that it is important to understand that “First and foremost, this is about patient care…We provide absolutely necessary home care services in patient’s homes…they may require oxygen, wheelchairs, rehab, wound care and hospice, which is incredibly important part of the services we provide.”
But under the current broad powers of municipalities to levy taxes and fines on those services, there is a real and present threat that such services could be greatly curtailed or stopped all together for some patients.
John Beard, President of Alacare, which provides nurses, home care aides, therapists, medical social workers, chaplains and volunteers for home health and hospice needs knows all too well the growing need for such services, but also the restrictions and regulations that are working against providers and ultimately against patients.
“Right now what is happening in all of our [healthcare] categories is the government is seeking to get more value for their dollar…We are all getting payment cuts as we go forward with Health Care Reform,” which he says can lead to decreased services offered to those in need. Alacare is the oldest and largest family-owned, Medicare-certified home health agency in the State and Beard has seen these opportunities and obstacles first hand.
Unlike a free market enterprise where supply and demand sets the cost of goods and services, Medicare/Medicaid and Third Party insurers are dictating reimbursement fees for medical services.
According to Beard and Czapla this means that their companies work on a very tight margin. By adding another level of county and municipal taxation, the companies which offer these services are in danger of being forced to cut services and, in extreme cases, being forced out of business altogether.
“This is something where the Federal, and State government and Third-Party Insurance tell you what they’re gonna pay you. And if your profit on an item is $20-$25 and you still have to provide maintenance and you have to give the city a minimum of $100.00 to service your patients, well that’s just stupid,” said Johnson.
Municipalities and cities claim that these healthcare providers use their roads, etc, and should pay for a license, wherever they deliver products or services. To that Johnson responses, “The cities don’t care, all they care about is making money. Ninety percent of the time they provide no service to justify getting the money [fee; license]…they say that the companies and nurses are using their highways and roads.” He scoffs at the notion saying, “The cities don’t pay for that, that money comes from the Federal government passed down through the State.”
In one documented instance, a company netted $150.00 but had to purchase a $1,500.00 license for a specialized piece of equipment.
“Many municipalities have very broad authority and they can require us to purchase a business and/or a delivery license in every single place that we go to, and oftentimes they base the amount of the licenses on gross receipts, not net, gross,” said Czapla.
Johnson, who has studied the matter extensively says, this is a very unfair and restrictive practice that needs immediate attention. He says that many rural counties just do not have the providers and therefore physicians must rely on those outside the county to fulfill the prescribed treatment and equipment. But, when they are restricted in what they can charge, and mandated to carry out the orders, “it just doesn’t make sense to charge them one more time.”
This is a problem Johnson and Waggoner want to fix.
