Owner says with the affordable care act, they cannot afford to provide services

COLUMBUS – Why is a thriving small business with good customer service, providing life saving medical equipment being forced to close? That is what Craig and Ghislaine Germano, owners of Link Medical Inc., are asking.

Craig Germano said Thursday will be their Columbus store’s last day and they are busy trying to help their customers find another supplier. Germano said this is not unusual these days, explaining that about one third of North Carolina small business medical equipment provides have been forced to close since the affordable care act was implemented. He added that this one third is fairly representational in other states as well.

“It tends to hit rural areas first,” he said. “Rural areas have a lot of transportation costs because of the distances they travel to customers.”

Germano added that, though the transportation costs are higher in rural areas, that’s not the main source of the problem. He said what causes these businesses to close is the increased paperwork, the huge increases in audits, increasing numbers of claim denials and extreme cuts in reimbursements – if the claims are paid at all.

According to Germano, receiving a response regarding a Medicare reimbursement can take two to three months. “They often incorrectly deny applications,” he said. “If the paperwork has the slightest discrepancy it is usually denied.  Resubmitting can take incredibly long, at least another two to three months.”

While Germano waits six months or more to hear back from the insurance company or Medicare, he has to pay the manufacturer, pay his staff, pay taxes and other operating expenses. After Germano has delivered the equipment and the customer has used it for four to six months, the claim may be denied and Germano is the one who has to cover those costs.

Yet the problem gets worse from there. If Medicare or the insurance company does pay the claim, reimbursement amounts across the board have been drastically reduced. Germano said a good example is oxygen, which many elderly and disabled patients need to live. Link Medical’s staff can make one or more trips a week to deliver oxygen to a patient.

“The reimbursement for oxygen used to be $200 a month,” he said. “Now its $39 for the entire month no matter how many trips you make. Its [the reimbursement] a fixed monthly payment regardless of how much you have to deliver or how far.”

Germano said while the equipment providers are hit hard, the problem runs across the whole spectrum of the medical industry. “Hospitals are impacted in the same ways,” he said. “Their paperwork is up and their payments are down. The amount of paperwork and the requirements put on doctors and hospitals is unreasonable.”

According to Germano Doctors are becoming increasingly frustrated with the problem as well. “Most of what doctors do today is not treating patients, its paperwork for insurance companies,” he said, adding that the paperwork and stringent rules have drastically increased since the affordable care act.

“These days one of most important people in a physician’s office is the person filling out the paperwork. If they make the slightest mistake it all goes around in circles or they [insurance companies] just won’t pay and we have to eat the cost.”

Germano is concerned about what will happen to his customers after the store closes. He said the future for the medical equipment industry does not look good. “Will they [patients] have to order their oxygen on line from Amazon?” he asked, expressing concern for the elderly person trying to wade through the bureaucracy and paperwork, much less the Internet.

While he says he will try to figure out how to re-invent his own career, Germano expressed concerned for his employees as well. “When we opened we had 11 staff members. Now we’re down to nine,” he said. “After Thursday it will be zero.”