WASHINGTON--Despite weeks of intense lobbying by the HME industry, a measure that would cap Medicare rental of home oxygen equipment and other DME is all but a done deal.

The House of Representatives narrowly approved the federal budget reconciliation bill, which includes nearly $11 billion in cuts to Medicare and Medicaid over five years, by a 216-214 vote Wednesday. The Senate approved the bill late last year by a 51-50 vote. The measure, called the Deficit Reduction Act, is now awaiting President Bush's signature.

The $39.7 billion spending reduction bill passed mainly along party lines, with 200 Democrats, one independent and only 13 Republicans voting against it. Four of those Republicans had originally supported the bill in December, but changed their votes to "no" last week.

The home care community was caught off guard by a last-minute provision added to the bill in December that caps Medicare rental of oxygen equipment at 36 months, then transfers title to the beneficiary (see HomeCare Monday, Jan. 9). The legislation also caps rentals of most other DME, with the exception of power wheelchairs, at 13 months. The DME caps will reportedly reduce Medicare spending by $700 million from 2006 to 2010.

While HME advocates were disappointed with the final vote, many said they would continue to educate legislators on the issue and look at ways to ease the effects of the mandate.

"All the home care stakeholders fought very hard in this battle and the grassroots response was extremely powerful. The final vote came down to the narrowest margin," said Kay Cox, president and CEO of the American Association for Homecare. "Now, AAHomecare will evaluate options for legislative or regulatory action in the near term, and we'll also look at long-term solutions to home oxygen reimbursement policy."

Proponents of the oxygen rental cap say changing the payment system from "perpetual" rental to "rent-to-own" is a needed step to save money for Medicare and patients. But one of the major arguments against the cap is that once a patient owns the equipment, the provider is no longer responsible for maintaining and servicing it.

According to AAHomecare, "ambiguous" language in the measure regarding payments and maintenance of equipment raises questions about what kinds of services home users will be able to count on.

"The oxygen provision is eminently ill-conceived," said Cara Bachenheimer, vice president, government relations for Elyria, Ohio-based Invacare Corp. "We have serious concerns about severing the consumer's relationship with the provider, particularly when the consumer needs this life-sustaining prescription drug, delivered via an FDA-regulated prescription device. We must work with consumer and clinician organizations to make sure members of Congress understand all the ill effects of this policy."

The VGM Group said it is now shifting its focus to the Hobson-Tanner bill, which would take the edge off some provisions of competitive bidding (see HomeCare Monday, Aug. 1, 2005). "We may have lost this battle, but the war's not over yet ... We now must turn our attention to persuading our representatives to co-sponsor and/or support H.R. 3559 (the Hobson-Tanner bill)," the buying group wrote on its Web site. "We also must persuade those who do support H.R. 3559 to add an amendment nullifying the industry-related items in the just-passed Deficit Reduction Act."

"I think our industry is always going to find a way, but this is really going to impact patients on a pretty big scale," said Cliff Woolard, president of Concord, Calif.-based Home Med-Equip.

Woolard said he is not worried about the financial impact on his business because over the past few years he has reduced delivery expenses by focusing on systems that allow patients to fill their own oxygen cylinders at home. "There's no way anybody can make [oxygen deliveries] and not lose their shirts," he continued. "I really think providers are going to go to [home filling systems] if they want to stay in the business, or they're going to have to seriously consider how they're going to limit service. And that scares me."

To view the text of the Deficit Reduction Act, also known as S. 1932, visit http://thomas.loc.gov.

To see how your member of Congress voted, visit http://clerk.house.gov/evs/2006/roll004.xml.