Stark Bill Would Delay Competitive Bidding; Senate Companion on the Way
WASHINGTON--In an enormous leap forward in the home medical equipment industry’s intense efforts to halt DMEPOS competitive bidding, Reps. Fortney “Pete” Stark, D-Calif., and David Camp, R-Mich., introduced bipartisan legislation Thursday calling for an 18-month delay in implementation of the troubled program.

H.R. 6252--the Medicare DMEPOS Competitive Acquisition Reform Act of 2008--would delay the first round of bidding for at least 18 months; round two would be delayed for up to three years.

In addition, Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, are expected to introduce a Senate companion bill to H.R. 6252 this week, industry insiders said.

“This is huge, huge!” emphasized Cara Bachenheimer, senior vice president of government relations for Elyria, Ohio-based Invacare. “Just a month ago, nobody would have put any money on this happening.”

As expected, however, the legislation comes with a price tag. Stark’s bill calls for a nationwide 9.5 percent payment reduction on products subject to the bidding program to cover its projected savings.

In working with Stark, Camp and other members of the House Ways and Means health subcommittee, which Stark chairs, the industry had been looking for a lesser across-the-board cut to offset savings that Medicare would see from the bidding program, said John Gallagher, vice president of government relations for Waterloo, Iowa-based VGM, “but the only thing offered was 9.5 percent.”

That has upset some providers who are not currently included in either round one or round two of bidding, according to Gallagher. But if the industry hadn’t accepted the offer, “it’s doubtful we would ever get a hearing again,” he said. “In an ideal world, we’d want no cuts at all, but the ‘pay-as-you-go’ environment is the political reality, and we had to agree to a cut.”

“The payment cut is a little higher than we had anticipated,” acknowledged Bachenheimer, “but by and large, the choice is between the 9.5 percent cut this year compared to a 26 percent cut next year. It’s a no-brainer.”

CMS, she reminded, has the power to institute the rates set through competitive bidding in all areas of the country, whether or not those areas are included in competitive bidding. CMS has said the round one rates average a 26 percent reduction, and those cuts could be applied to all providers as early as next year. “Some people forget that CMS has that authority,” Bachenheimer said.

There is another plus to the proposed legislation, she added. Under the Stark-Camp bill, the CPI update, which the industry lost years ago, would be reinstated for all items in 2010 and continue through 2013. “Then we would get a two percent increase in 2014,” Bachenheimer said, referring to the items that would have been subject to the 9.5 percent reduction.

Seth Johnson, vice president of government affairs for Pride Mobility Products, Exeter, Pa., said the bill also contains another victory for the industry and Medicare beneficiaries. “The Stark bill would carve out complex rehab [from competitive bidding],” he said. “It would, however, be subject to the 9.5 percent reduction.”