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Perry Home Medical Supply to close

Medicare reimbursement a major factor

Published: Friday, Jan. 31, 2014 1:01 p.m. CDT • Updated: Friday, Jan. 31, 2014 1:05 p.m. CDT

PRINCETON — Perry Memorial Hospital has announced it will be closing its Perry Home Medical Supply store, located on the first floor of Perry’s medical office building at the hospital on Park Avenue East.

“Perry Memorial Hospital, as an organization, is committed to continue to focus on quality patient care and customer service, and we also must assure our hospital can remain financially viable in a constantly changing and very turbulent environment,” said Perry’s CEO/President Rex Conger.

Slowly between now and June 1 — the date anticipated for closing the service, Conger said Perry Home Medical Supply store will be eliminating its inventory and services.

Conger said the biggest reason behind closing the service is Medicare and the way it reimburses the hospital.

“Medicare has reduced what they are willing to pay for, and secondly, if you bill for something and they don’t think you did it right, then you have to send (the money) back to them,” Conger said.

In a press release issued by Perry, it said Medicare has focused nationwide on durable medical equipment (DME) service providers like Perry Home Medical, putting many changes and regulatory requirements into place. Coupled with those changes and regulations, the billing requirements not just for Medicare, but also commercial insurance providers and Medicaid continually evolve and are complex, in that rules and guidelines for billing are different for each provider, which makes it increasingly more difficult for small DME stores.

“A hospital-owned DME retail store like ours does not have the resources large DME companies have to keep up with the changes and meet the new requirements,” Conger said. “This leads to increased risk for fraudulent billing, which could lead to penalties, fines, sanctions and a tarnished reputation.”

Another issue revolving around the upcoming closure is the size of Perry’s store. Because it is small and doesn’t have the sales volume of a much larger facility, the store is unable to buy products in quantities, which would afford them discounts.

“Online services are able to buy huge amounts of product, so they end up being able to discount it, whereas we are small and not capable of that kind of inventory,” Conger said.

Considering those factors, Conger said the hospital is concerned with the financial impact Perry Home Medical has on the hospital’s bottom line. The service has not been able to break even for the last four fiscal years.

“We believe that DME as a service has changed to the point where it is no longer reasonable for us to provide it,” Conger said, adding it is with regret the service will close because it affects patients and the three staff members who work there. Conger said the timing between this announcement and the actual closing will give those employees the opportunity to seek other employment at the hospital.

The announcement came less than a month after PMH closed its Women’s Health Care Unit/OB Department at the hospital.

“I think this adjustment, similar to the closing of OB, was intended to maintain the long-term financial stability to Perry Memorial (Hospital),” Conger said. “At the same time, we are looking to offer new services to the community as we move forward.”

Conger said there are new, exciting things in the planning stages at Perry Memorial Hospital, which the public will become aware of in the near future.

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