Victory!

July 15, 2008, should be remembered as the industry's watershed day. It is the day Congress voted in favor of the Medicare bill that delays the competitive bidding program for certain DME.

Although President Bush vetoed the bill (H.R. 6331), late in the day on that Tuesday, both the House and Senate voted to override the president's veto. Now this bill is law.

The new law, called the Medicare Improvements for Patients and Providers Act, will delay the bid program by 18 to 24 months, exempt high-end rehab items from the bid program and pay for the delay with a 9.5 percent reimbursement cut on items included in round one of the bid program.

A 9.5 percent cut (effective January 2009) is certainly a price to pay, but it was necessary under Congress' current “pay-go” rules, which require all legislation that costs money to be funded. But it's far less of a price than the 26 percent average cut that CMS could have applied across the country starting in January 2009.

Remember, the original statute gave CMS the authority to apply bid rates to non-bid areas starting in 2009, and I expect CMS had every intention of doing so. The new law delays this authority until round two is complete, putting off the authority for at least three years.

Importantly, the Medicare package also includes a provision that repeals the mandate for title transfer of oxygen equipment that was originally part of the Deficit Reduction Act. The law does not include any other DME provisions, such as any additional cut to oxygen or elimination of the purchase option for standard power wheelchairs.

Following are details of the law's provisions:

Competitive Bid Program Delay

• Exemption for High-End Rehab Power Wheelchairs and Related Accessories

  Delays rounds one and two of the bid program by 18-14 months.

• Offset to Pay for Delay

  Terminates contracts awarded under round one and restarts the contracting process in those areas in 2009.

• The round two contracting process will begin in 2011.

• CMS cannot apply bid rates in non-bid areas until round two is completed.

• Excludes complex rehabilitation wheelchairs, and related accessories when furnished with such wheelchairs, from competitive bidding.

• In January 2009, the product categories included in round one will be reduced by 9.5 percent nationwide. This policy does not affect diabetic supplies furnished by retail suppliers because they were not covered by the bidding program.