Bill Thomas: He’s got the Ways and Means

Friday, December 31, 2004

For the influence that Bill Thomas has exerted over the DME industry, look no further than this remark by one of the leading CEO’s in this industry: “Thomas has a total distaste for our industry. It’s amazing to me that one Congressman can have this much impact on an industry.”

If it wasn’t for Bill Thomas, there’d be no competitive bidding. No other member of Congress harbors the same passion for it or has been so peculiarly poised to bring it life. Since January 2001, Thomas has chaired the House Ways and Means Committee. Somehow, this Congressman from California got competitive bidding on the brain. Nobody knows quite how. There are stories: He knew someone who got a raw deal from a DME dealer; he thinks all suppliers are crooks. Or maybe he simply believes DME, like Medicare in general, needs an infusion of competition.

Whatever the reason, Thomas is a devotee. His enthusiasm for the measure ensured its placement in the House version of the Medicare Prescription Drug and Medicare reform package. Eventually, despite the Senate’s rejection of competitive bidding for a seven-year price freeze and a mandatory accreditation requirement for HME suppliers, the dreaded provision was signed into law as part of the Medicare Modernization and Prescription Drug Act.

In 2007, CMS will use competitive bidding to set prices in the 10 largest metropolitan areas. Two years later, the legislation calls for competitive bidding in the 50 largest metropolitan areas. Using Polk County and San Antonio, where competitive bidding drove payments rates south by about 20%, the industry is facing similar across-the-board price reductions in 2007.

And bear in mind, the limbo bar for competitive bidding will be lowered after CMS concludes implementing the FEHBP-driven reductions on Jan. 1, 2005. Bill Thomas isn’t likely to play much of an active role in your business from now on, but his ghost will be haunting your bottom line for years to come.