Medicare budget woes complicate HME lobbying

Monday, February 28, 2005

WASHINGTON - With a $417 billion deficit hanging around their necks like an albatross, federal lawmakers are under extreme pressure to cut costs, making the industry’s efforts to stave off competitive bidding and roll back other reimbursement cuts more difficult.

Fortunately, the president’s 2006 budget, appears not to include any new homecare cuts in Medicare, AAHomecare reported last month. What’s more, with Washington looking to save money wherever it can, that could help industry efforts to educate lawmakers on the cost-effective nature of homecare, say industry watchers.

That is AAHomecare’s plan.

  “Because homecare now encompasses virtually every service short of surgery, homecare offers the White House and Congress a great opportunity to reduce costs while expanding access to vital care for millions of Americans,” said AAHomecare CEO Kay Cox. 

The Medicare Modernization Act for 2003 mandates that Medicare implement DME competitive bidding in 10 of the largest metropolitan statistical areas in 2007 and expand the program in 2009. What’s more, giant budget deficits for as far as the eye can see give lawmakers impetus to follow through with the dreaded reimbursement cut.

Given the scope of the cuts imposed by the MMA, it seems unlikely that congress would reduce DME reimbursement further, but there is no guarantee, say industry watchers.

“As they look for ways to reduce the deficit, there will be changes to Medicare, and we need to be vigilant and build relationships with legislators and go to them when we see proposals introduced that will negatively impact the industry,” said Seth Johnson, director of government affairs for Pride Mobility Products. “I haven’t heard of anything that will negatively impact the industry, but everything is on the table this year.”

In an odd twist, given the scope of Medicare cuts likely to come, the industry might count itself lucky that the MMA hit it so hard in 2003, Sen. Charles Grassley, R, Iowa, told VGM Group officials late last year.

“When he said that, I said, ‘I don’t know if anyone is happy with national competitive bidding, senator,’” said John Gallagher, VGM’s vice president of government relations. “Grassley said he wouldn’t expect so, but with the cuts coming down the pike, particularly for hospitals and physicians, we may be glad we took our cuts early on.”