Industry makes progress on NCB, cuts

Sunday, June 15, 2008

WASHINGTON -- June 12 will be a day to remember for the home medical equipment industry. On that day, it managed not only to get a bill introduced that would delay national competitive bidding but also to stave off another attempt to cut oxygen and power wheelchair reimbursement.

Competitive bidding
On June 12, Rep. Pete Stark, D-Calif., introduced a bill that would terminate Round 1 contracts and re-bid them in 18 or 24 months. H.R. 6252 would also delay Round 2 until at least 2011.

The Senate plans to introduce a bill with similar language this week, according to industry sources.

"We have unprecedented support on this issue," said Cara Bachenheimer, senior vice president of government relations for Invacare.

The delay, however, would come at a cost. To pay for the lost savings from delaying competitive bidding, the bill proposes, starting in 2009, a 9.5% payment cut nationwide for all product categories included in Round 1 of the program (As part of competitive bidding, CMS plans to slash prices for the products, on average, by 26%).

Industry sources acknowledge the arrangement's not perfect.

"Clearly, the cut is higher than many in the industry had anticipated," said Seth Johnson, vice president of government affairs for Pride Mobility Products. "Providers are concerned about the cut, but its impact depends on a lot of different business factors that they're now looking at."

The bill also proposes numerous program improvements, such as requiring CMS to notify bidders of paperwork discrepancies and give them the opportunity make corrections.

With bills to delay competitive bidding in both the House and Senate and support from Republicans and Democrats, the industry's chances of being included in a Medicare package look good, industry sources said.

"This is a good story for us," Bachenheimer said.

Additional cuts
Also on June 12, an attempt by Sen. Max Baucus, D-Mont., to move forward with a Medicare package that would cut reimbursement for home oxygen therapy and eliminate the first-month purchase option for power wheelchairs failed. The cuts were included to help prevent a cut to physician rates from going into effect July 1.

"Baucus needed 60 votes to move his package to a final vote without debate, and he only got 54," Johnson said. "Now he has to go back and work with (Sen. Chuck Grassley, R-Iowa)."

Grassley's Medicare package doesn't include oxygen or power wheelchairs cuts.

Even though Baucus' package included the cuts, industry sources believe he's softening. Had Baucus been able to move his package to a final vote, sources said, he had pledged to eliminate the cuts and add language to delay competitive bidding.