Super committee delays inevitable

Tuesday, November 22, 2011

WASHINGTON – Expect a bumpy 2012 now that the super committee has failed to come up with a deficit reduction plan, industry stakeholders say.

The super committee announced last week that it couldn’t agree on a way to reduce the deficit by at least $1.2 trillion over 10 years, triggering automatic cuts slated to go into effect Jan. 1, 2013. Among them: a 2% across-the-board cut to Medicare, which represents, according to reports, a $13 billion blow to HME over 10 years.

But industry stakeholders expect members of Congress to try to replace or minimize these cuts with other cuts, even if that may seem like an unpopular move in an election year.

“No one likes making cuts in an election year, but Republicans are determined not to have these cuts happen, because they include defense cuts,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “They’re going to step in and try to change things.”

“Try” being the operative word, says Seth Johnson, vice president of government affairs for Pride Mobility Products.

“We believe they’re going to try; we don’t know if they’re going to succeed,” he said. “Based on what we saw this summer and with the super committee, we’re not confident.”

Definitely not an option: Repealing the automatic cuts. President Obama has already stated he will veto any such plan.

For the industry, this means two things. One, with lawmakers still looking for savings to not only reduce the deficit but also avoid a cut to physician payments slated to go into effect Jan. 1, 2012, HME is still very much in danger. Two, without a deficit reduction bill from the super committee, the best legislative vehicle for replacing competitive bidding with a market-pricing program is the “doc fix” bill.

Any way you look at it, threats are mounting and opportunities are dwindling, says Wayne Stanfield, president and CEO of NAIMES.

“We’re fighting an extremely uphill battle,” he said. “Suppliers must not presume that something is going to stop Round 2 of competitive bidding.”