Getting Rid of the FEHBP-Based Cuts

The quintessential Washington wisdom this year is that of all election years — it will not be an active legislative season. So the HME industry must use this time to enlist political support for the objectives we have, both short-term and long-term. Although it appears all attention is focused on the presidential election, Congress is still charged with a number of must-do actions this year.

As an industry, we simply have too many issues on our plate to be politically complacent. Think of the sheer number of issues imposed on our industry by the Medicare Modernization Act (MMA). We cannot afford to sit on the sidelines.

In the short term, we are faced with reimbursement cuts for five categories of DME slated for January 2005 implementation. This provision of the law mandates that the Centers for Medicare and Medicaid Services cut Medicare reimbursement rates to be in line with rates that the Office of Inspector General has identified from certain Federal Employee Health Benefits Plans (FEHBP). The five DME categories are oxygen, standard manual and standard power wheelchairs (K0001 and K0011), nebulizers, air mattresses and diabetic supplies (lancets and strips).

Should we sit around and watch the cuts happen? You know the answer. This MMA provision was ill-founded and should be repealed.

This month, everyone in the industry must write their members of Congress. (You can find their contact information by visiting http://thomas.loc.gov, scrolling to the bottom and clicking “contact us.”) Use the points below in your letters, and, at the end of each, be sure to ask your senators and representatives to support the repeal of this offensive provision.

1. Background: The 2003 Medicare Modernization Act contains a provision to make reimbursement cuts to five categories of DME based upon Federal Employee Health Benefits Plans (Section 302(c)(2)). These payment cuts should be repealed for four reasons.

2. The data used to identify FEHBP pricing was scanty at best, even by the OIG's admission. In a June 2002 letter to Sen. Tom Harkin, the OIG stated that the data used to identify FEHBP pricing was insufficient for an “inherent reasonableness” reduction. Bad data makes bad policy.

3. The provision was inserted in the Medicare bill at the eleventh hour, providing members of Congress no opportunity for consideration or debate about the merits or deficiencies of the proposal.