Healthcare reform: Industry ponders next move in new reality

Monday, March 22, 2010

WASHINGTON – With a stroke of President Barack Obama’s pen, the HME provisions included in the Senate’s healthcare reform bill became law this morning.

H.R. 3590, passed by the House of Representatives on Sunday, packs a punch: It will, among other things, expand Round 2 of national competitive bidding to another 21 cities and eliminate the first-month purchase option for standard power wheelchairs.

It’s a done deal, agreed Walt Gorski, AAHomecare’s vice president of government affairs.

“We’re assessing what the next vehicles are for changes,” he said.

The Senate now takes up a reconciliation bill also passed by the House on Sunday that contains proposed changes to H.R. 3590. The only one related to HME: a revised tax on manufacturers of medical devices. It proposes a 2.3% tax, rather than a 2.9% tax, on Class I, II and III devices beginning Jan. 1, 2013.

Conceivably, the Senate could propose additional changes to the reconciliation bill, sending it back to the House for approval, but industry sources aren’t holding their breath.

“The bigger politics at play are that the Republicans don’t have the votes to make changes and the Democrats don’t want to make any changes,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “The agreement was this was the package.”

The House and Senate will, however, visit other healthcare-related legislation in the months ahead, giving the industry the opportunity to attach language that would eliminate competitive bidding (the goal of H.R. 3790) and preserve the first-month purchase option for standard power wheelchairs.

“The conventional thinking right now is that they will probably need to do a technical corrections bill and a physician payment fix bill,” Gorski said. “Clearly, we are very focused on our legislative priorities and how to move them in light of the passage of health reform.”

Other HME provisions in H.R. 3590:

*Competitive bidding pricing will be implemented in every metropolitan statistical area (MSA) by 2016.

*The 2% increase for product categories included in Round 1 of competitive bidding will be eliminated in 2014.

*A mandatory compliance program will be required for all providers, including HME providers.

*A face-to-face exam will be required for all HME.

*A yet-to-be defined “productivity adjustment” will lower future consumer price index-urban (CPI-U) updates to the HME fee schedule.