President's budget would squeeze Medicaid

Thursday, February 17, 2011

WASHINGTON - President Obama's proposed 2012 budget contains no love for the HME industry.

The $3.7 trillion package, released Feb. 14, proposes tying Medicaid reimbursement rates for home medical equipment to Medicare competitive bidding rates in those states where the program is in effect. The budget estimates such a move would save $6.4 billion over 10 years.

"That's extremely significant," said Walt Gorski, vice president of government affairs for AAHomecare. "That's on top of $17 billion (lost) from competitive bidding. How much more can they squeeze out of HME?"

In states where Medicaid discounts the Medicare rate, that would force Medicaid rates below the already low competitive bidding single payment amounts, which were reduced by an average of 32%, said Gorski.

But Medicaid already has the authority to adopt bidding rates, says Cara Bachenheimer, senior vice president of government relations for Invacare. This proposal would simply make it mandatory.

"We've always anticipated, assuming that the bid program continues, that everybody's going to be latching onto those ridiculously reduced rates," she said. "This should be a wakeup call to anyone who thought, "if I minimize my Medicare business, I will be safe.'"

The budget also proposes a prepayment review for all power wheelchairs, for an estimated $240 million in savings over 10 years.

"I view it, and I think providers view it, as an opportunity to work with Congress to advance reform within the Medicare program that moves away from the current pay and chase model to one that establishes a real time, efficient system," said Seth Johnson, vice president of government affairs for Pride Mobility. "That's something the industry has supported."

The president's budget is the first step in a months-long process that will see both the House and the Senate come up with their own budgets, before reconciling them into one joint budget, and moving it forward.