Spring 1986 To control HME spending, policy-makers in Washington begin to discuss using inherent reasonableness, a statute that was designed in 1967 to adjust physician payments.

December 1987 President Reagan signs into law the Six-Point Plan-a victory of industry lobbying. The plan includes a key provision that requires Medicare carriers to disclose data that they use in developing rate calculations for IR.

Inherent Reasonableness Spring 1985 The Health Care Financing Administration hires a private contractor to design, implement and evaluate by the end of 1986 a competitive bidding project. Studies are to take place in Los Angeles, Kansas City, Mo., and the Washington/Baltimore area. The project never gets off the ground.

December 1987 President Reagan signs into law the Six-Point Plan. The law prohibits any pilot projects or studies by the Department of Health and Human Services, such as a competitive bidding project, until 1991.

Competitive Bidding Fall 1986 As part of the Omnibus Budget Reconciliation Act, hospitals would be financially responsible for all outpatient services, either directly or by arrangement with other providers. Both hospital groups and HME associations strenuously object to the bill, saying it would add administrative and legal burdens.

Fall 1988 HCFA publishes a Notice of Proposed Rulemaking to bundle HME reimbursement to hospitals. Aggressive lobbying prevents the rule from being enacted; however, it is not officially taken off the books until a decade later.