Humana Adopts Medicare National Mail Order Pricing

When it comes to the steep cuts Medicare plans to implement as part of Round 2 of competitive bidding, industry stakeholders have been waiting for the other shoe to drop.

In the wake of the announcement of the cuts—on average, 45% below the current fee schedule—there have been reports of private payers and Medicaid programs looking to slash pricing. But now, it looks like it’s happening on a much bigger scale.

Health insurance giant Humana on May 30 notified providers via a notice on its website that it will follow Medicare’s lead and, starting July 1, pay for DME and mail-order diabetes supplies in 91 cities using pricing from Round 2 for its Medicare Advantage (MA) plans. Humana also notified members of those plans by mail.

The notice on Humana’s website appeared to be down much of last week but a spokesman for the company provided a new link late on Friday:

Stakeholders had thought maybe Humana was having second thoughts.

“We thought they may be relooking at it,” said Jay Witter, vice president of government affairs for AAHomecare.

But that may have been wishful thinking for a company that hasn’t exactly ingratiated itself with providers. Two years ago, Humana announced on its website that it had established a “long-term relationship” with Apria Healthcare and that it was terminating relationships with “several providers.”

Stakeholders are still puzzled by this sentence in the notice: “This implementation affects only non-network providers.” Does this mean in-network providers won’t be subjected to the reduced pricing?

“That could be interpreted many different ways,” Witter said.

Humana would be jumping the gun if it adopts pricing from Round 2 right off the bat, says provider Cory Baker, who has been negatively impacted by the company’s relationship with Apria.

“It hasn’t even been proven that these rates are sustainable,” said Baker, general manager and compliance officer at Choice Medical Supply in Abilene, Texas.

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