Thursday, July 31, 2003

I talked to one home medical equipment provider last month whose crystal ball looks like this: The House and the Senate won’t be able to reconcile their different visions for Medicare reform. Medicare reform legislation goes nowhere this year. Because next year is an election year, Congress won’t touch Medicare reform. But after the next election, watch out.

Afterall, BBA ’97, which gave us competitive bidding demonstration projects in Florida and Texas as well as a 30% reduction in reimbursement for home oxygen, was delivered the year after a presidential election.

How likely is Congress to fail to get its act together? Moreso everyday. The president was looking for a Medicare reform bill by July 4. When that didn’t happen, he shifted his expectations to July 30. At press time, few believed anything would happen by the end of the month, and perhaps not until August, September or even October.

The House and the Senate are digging deeper trenches every day. The House wants whatever Medicare reform legislation is passed to promote competition in the Medicare market. The House does not like the Senate’s plan to expand the Medicare program without more significant structural reform.

“The question is: what is the deal killer in the Senate, and what’s the deal killer in the House?” a House Republican strategist told The New York Times recently. “It’s not clear what the walk-away point is for either side. It’s just not clear.”

What’s clear for the HME industry is this: If the Senates’ CPI freeze wins the day, very little changes for HME providers - unless, of course, a real accreditation measure is passed and you have to become accredited if you want to bill Medicare. If the House proposal is ascendant, competitive bidding will begin to haunt the sleep of 108,000 HME providers.

If the nothing happens, if the conferees can’t compromise, the industry wins yet another reprieve. But then next year is an election year. Watch out. HME