Medicare Drug Act, aka ‘A Fleecing of the DME Industry’

Saturday, January 31, 2004

Stewart Pace

The January issue of HME News contained a considerable amount of information and commentary regarding the recently passed Medicare Prescription Drug Act. The remaining questions, after the fact seemed to be: ”How did this happen?” “Where do we go from here?” While I can agree with most of the industry pundits as to many of the root causes, I must state that the degree to which we find ourselves mired in this quagmire was an exacerbation of our industry’s propensity to compromise.

For many years, Congress and the Medicare system have trotted out competitive bidding and attempted to force feed this onerous, unworkable plan to the HME industry. And yes, we have continued to pay a price for having won these past battles, with reimbursement cuts and misguided legislation that constantly threaten our ability to provide the necessary services and the patients’ rights to receive such needed services. It is unfortunate that should all the provisions of this act be implemented, the reality now is that our fears may turn into reality. The culprit of our undoing was our confidence, or should I say overconfidence, that we had developed great relationships with the powers that be at CMS and Congress, and if we just spoon fed them an arm and a leg, perhaps, they wouldn’t chop off the head.

So, the master plan for our politically weak industry was to offer up a potpourri of alternatives, such as CPI freezes, rate reductions, JCAHO accreditation, and miscellaneous other compromises, but please don’t force us to swallow that horrible tasting “competitive bidding” thing. And, I must confess that the vast majority of us who cared about this business went along with this plan, satisfied that every cloud has a silver lining. We believed we had relationships with our trusted (?) leaders and that compromise was the way to go.

Well, as usual, hindsight being 50-50 we were wrong!

To illustrate my point, I recall the contract negotiations many years ago between Jerry Jones, owner of the Dallas Cowboys, and Deion Sanders, athlete extraordinaire, that I will use as an analogy. If you recall, Deion finally signed a contract for an unheard of amount - $35 million. Soon after this occurred, Jones and Sanders appeared in a commercial together.

Jerry Jones said, “Well, Deion, what’s it gonna be? $15 million or $20 million?

Deion Sanders said, “Both!!”

Well, isn’t this what just happened to this industry? We offered up huge compromises without assurance that our trustworthy legislators would capitulate. Instead, they decided that they liked our ideas so much - they took BOTH!

Again, with magnificent hindsight, I believe we should have fought competitive bidding, tooth and nail, and then when it looked as if our efforts were going to fail, tell CMS and Congress to “bring it on!”, because no one believes they would ever implement the “thing” on a national basis anyway.

So, what do we do now? It appears we have more work to do to stave off implementation of the poisons that would kill us. It is for certain that we need money, lots of money, to throw at the problem in order to gain political clout and for the vast numbers of providers to lock away their empathy and join the fracas. I recently read an article that stated that what we need to concentrate on is education of our senators and congressmen. Well, that’s all well and good, however, we had better do a better job of educating the public so they will know “the rest of the story.” That being the story of a federal bill enacted into law that was so poorly compromised in Congress that even the AARP has only lukewarm feelings. The biggest beneficiaries of the Prescription Drug Act are the senators and congressmen who can now go back to their respective states and brag to the voters what a good job they did for them. DUH? It should now be all too clear that what matters most to our illustrious leaders is votes and it doesn’t take an Einstein with a calculator to determine that there are more voting public than voting providers.

So, when the battles begin again over implementation of the provisions in this drug bill, please keep in mind what bad compromises can do to or for us, especially since I only have one arm and one leg left and my first born is grown, married, and in hiding.

- HME provider Stewart Pace is senior vice president /corporate development at Med-South in Jasper, Ala.