Competitive bidding & CPI freeze to meet in conference

Sunday, June 29, 2003

June 30, 2003

WASINGTON - The Senate and House both passed versions of Medicare reform legislation last week that included very different proposals for how to cut DME expenditures.

The House reform includes competitive bidding for DME. The Senate does not, but includes a seven-year CPI freeze for DME and a provision that calls for HME providers to become accredited.

A conference committee composed of members from each chamber will hammer out what the final bill looks like. The President wants a bill on his desk by July 30; the question is whether lawmakers will be able to reconcile their differences and meet that timetable.

After a week-long July 4th recess, the two versions will meet head to head in a conference committee. The House brings legislation that squeaked by in a full chamber vote largely along party lines 216-215. The Senate mustered stronger support to pass its legislation 76-21.

Historically, according to Invacare’s Director of Government Affairs Dave Williams, the House prevails in conference with the Senate.

“ These guys [in the House] are street fighters while the Senate is more genteel,” said Williams.

But, as Williams and others point out, the issue is far more complicated than who can take who in high-tech brawl.

“ If the House version were to go through as is, they’d lose the Democratic vote,” said John Gallagher, The VGM Group’s vice president of government affairs. “They’d lose the bipartisanship in the Senate because the Democrats there would see too much [tilted toward] the PPOs, HMOs and privatization.”

If the Senate muscles through its version, the House conservatives will back off, said Gallagher. “They’ll see it as too big an entitlement,” he said.

Congress has yet to disclose which members of Congress will sit on the conference committee when Congress reconvenes, but insiders say Bill Thomas (R-Calif.), a tenacious supporter of competitive bidding, and Sen Charles Grassley (R-Iowa) are likely bets.

The HME industry, as represented by the voice of AAHomecare, has declared support for the Senate version of the legislation. Indeed, the VGM Group underwrote part of a fund-raiser for Grassley over the weekend. And Invacare CEO Mal Mixon is reportedly hosting a fundraiser for Grassley this evening.

Whether competitive bidding or the CPI-freeze emerges from the conference committee is anyone’s best guess. Heartened by the president’s declaration of support for the Senate bill, and the close, partisan call in the House, Williams and Gallagher are betting the Senate’s version prevails, though their margin for comfort is slim.

Another scenario says everything prevails.

“ You could still have a CPI freeze while they get competitive bidding off the ground, or IR cuts take effect,” said Cara Bachenheimer, a healthcare attorney at Epstein Becker & Green in Washington.

She doesn’t think that will happen. “They’ll take either the House or Senate DME provisions,” she said.