Healthcare reform: Senate releases bill, sets stage for showdown

Sunday, November 22, 2009

WASHINGTON - The Democrats in the Senate released a healthcare reform bill last week, and as industry stakeholders expected, they didn't drop any provisions related to HME. They did, however, tweak at least one provision.

The bill, like an earlier bill released by the Finance Committee, includes a provision that would tax medical device manufacturers based on their market share. But it reduces the burden to $20 billion over 10 years instead of $40 billion over the same period.

"It's still really bad," said Cara Bachenheimer, senior vice president of government relations for Invacare. "The worst of it: The effective date is still 2010 based on sales in 2009."

Other HME provisions in the Senate bill:

*    Expand Round 2 of national competitive bidding by 21 cities (from 79 to 100). Apply bid rates nationwide by 2016.

*    Eliminate the first-month purchase option for standard power wheelchairs beginning Jan. 1, 2011. Pay providers 15% of the purchase price in months one through three, and 6% of the purchase price in months four through 13. Exempt complex power wheelchairs.

*    Implement fee schedule updates each year by a "productivity adjustment," an estimated -1%.

*    Exempt pharmacies that have less than 5% of their revenues coming from Medicare DMEPOS from the accreditation requirement.

The Senate was expected to take a preliminary vote on the bill Saturday (Nov. 21) and begin debate the week of Nov. 30. When the bill does hit the floor, there may be more tweaking, industry stakeholders said.

"We're hearing that there's support among the Democrats in the Senate to modify or remove the tax on medical device manufacturers," said Seth Johnson, vice president of government affairs for Pride Mobility Products.

When the Senate does finally approve a bill, the stage will be set for a showdown between the Senate and the House. As far as HME is concerned, the House's final bill contains similar, but in some cases slightly different, provisions. One example: The House also seeks to tax medical device manufacturers, but it levies a flat fee of 2.5%. Additionally, the House's provision wouldn't go into effect until 2013.

Another example: The House also seeks to eliminate the first-month purchase option for standard power wheelchairs, but it doesn't front-load payments.

For the HME provisions in the House bill, go here: