Providers ponder Medicare cuts

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Saturday, January 31, 2004

WASHINGTON - The prospects for relief from the devastating Medicare Prescription Drug Act were unclear last month as Congress reconvened, but the HME industry’s political lobbies expect to push for legislation that would mitigate the impact of the FEHPB cuts and the transition from an AWP to an ASP model for pricing respiratory medicine slated for next year.
Clark Robichaux

Whether a corrections bill comes to the floor in this Congress is a political football no one yet has a grip on.

“There could be a correction bill,” said John Gallagher, vice president of government relations at the VGM Group. “Congress can’t negotiate prices with the pharmaceutical companies, and there’s the Canadian issue, so the Democrats could easily force this back as an issue.”

After President Clinton signed the Balanced Budget Act into law in the summer of 1997, slashing reimbursement for home oxygen by 30% and ushering in a suite of five competitive bidding demonstration projects, it was not until Dec. of 1999 that the HME industry realized some legislative relief.

In that ‘give-back’ bill, HME providers were dropped from plans to implement consolidated billing, won back CPI increases for 2001 and 2002 and skirted the reach of inherent reasonableness until the GAO published a report.

It’s not yet certain where the political will to make changes to the MPDA will come from. In early January, a CNN/USA Today/Gallup poll found that 53% of adults nationwide didn’t believe the prescription drug benefit went far enough.

Although the electorate might not be sold on the drug benefit, the gains for pharmaceutical and insurance companies in the legislation might preclude a push for corrective action from those powerful lobbies.

The HME industry, according to many observers, turned out to be the big loser in the MPDA, but the industry’s political clout is hardly strong enough to be the driver of corrective legislation.

“We need to get on a moving train,” said Cara Bachenheimer, vice president of government relations for Invacare.

Bachenheimer said that one possibility would be to attach DME relief to a technical corrections bill that would remedy non-budgetary issues.

“If that doesn’t pan out, there will be other bills that have to move,” she said.

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