Local Medical Equipment Stores Struggling with Impending Medicare Reimbursement Rate Cuts 

Medicare patients may soon be paying more out-of-pocket for medical equipment.

More cuts to Medicare’s reimbursement rate for the products are looming.

Congress passed legislation requiring competitive bidding for equipment prices to ensure patients get equipment they need at reduced costs, benefiting them and taxpayers.

But, a local business says it’s taking a toll on them and those they serve.

Locally owned Coastal Med Tech has been serving folks throughout Maine for almost three decades.

They sell and rent medical equipment at six stores around the state, including here in Bangor.

But, they say medicare reimbursement cuts are making things complicated.

“The industry is seeing business closures all over the country right now as a result of these cuts both in metropolitan and in rural areas because people have had trouble, even sustaining the January cuts,” said CFO of Coastal Med Tech Cathy Hamilton.

In Maine, there was a 25 percent cut at the start of the year and there’s a possibility that will soon double come July 1st.

Here’s an example, in 2015 Coastal Med Tech tells us they used to be reimbursed about $40 a month to deliver portable oxygen to a patient. Now with these July 1st cuts, they’ll only be reimbursed about $18.

Coastal Med Tech is weighing its options.

They know large, nationally owned companies can absorb these extra costs, but they just can’t.

“In rural Maine, it is not unusual for a company to drive an hour one way to deliver equipment and that’s all included in the reimbursement,” said Karyn Estrella, President & CEO of “HOMES,” Home Medical Equipment & Services Association of New England–a trade association that advocates for the home medical equipment industry in New England.

And if Coastal Med Tech raises their prices, they fear they may get less referrals.

“We don’t want to lose employees. The paperwork that is required to get paid by any insurer is so large that we need all of our staff,” said Hamilton.

Coastal Med Tech says they may have to cut back on their delivery distances, leaving patients waiting longer for items or making them come into their stores themselves.

HOMES says Coastal Med Tech is not the only one struggling.

“All of these companies like Coastal Med Tech, they’re in the business to take care of people and they take pride in the quality of the product and the quality of the services they’re able to provide. That is going to be severely challenged and unfortunately it’s the Medicare beneficiary that’s going to bare the brunt of it,” said Estrella.

Coastal Med Tech and others are asking their customers and family members to reach out to members of Congress to stop the cuts or even to just delay them for now. The Congressional switchboard number is 1-866-338-1015.

In response, the Centers for Medicare and Medicaid services has provided us with a blog with information about the issue. You can read it here.