ARLINGTON, Va. — The American Association for Homecare said yesterday it intends to fight the HME cuts proposed by the Senate Finance Committee, which is currently debating a "framework" document for health care reform issued by Chairman Max Baucus, D-Mont., Sept. 6.
According to AAHomecare, that framework includes a number of proposals that would erode Medicare reimbursements for the home medical equipment sector. There is also a provision calling for an excise tax on medical device manufacturers.
"The American Association for Homecare is disappointed that the Senate Finance Committee 'framework' circulated earlier this week by Chairman Baucus would target the durable medical equipment sector for further cuts under Medicare," said association President and CEO Tyler J. Wilson.
"Reductions in Medicare reimbursement, curbs on inflation 'updates' and excise taxes are bad medicine for a sector that is already struggling due to past actions by Congress," Wilson said.
The reductions and new fees proposed by the Finance Committee bill are aimed at oxygen, power wheelchairs and the broader HME sector generally, AAHomecare said.
"Congress should note that this sector has endured numerous cuts in recent years, notably with the Medicare Modernization Act of 2003, the Deficit Reduction Act of 2005 and the Medicare Improvements for Patients and Providers Act of 2008," Wilson said.
"As a result of these reductions, power wheelchair reimbursements have declined more than 35 percent in the past five years and oxygen reimbursement has declined by nearly 50 percent over the past decade. A further result is that spending growth in this sector is less than 1 percent per year according to the most recent National Health Expenditures data.
"The problems facing the health care system in this country will not be helped by heaping on additional cuts to home medical equipment and services," Wilson continued. "The exact opposite is true. Senate Finance is proposing cuts to the most cost-effective sector in Medicare."
AAHomecare's analysis of the bill follows:
Oxygen Payment Reforms: This provision would repeal the 36-month rental cap, reduce the current rental amount paid through the fee schedule for stationary equipment and contents and increase the rental amount paid through the fee schedule for portable oxygen contents.
Though not contained in the framework released by Baucus, AAHomecare believes that the Finance Committee is looking to modify monthly payment rates as follows: concentrator-only rate, $80; traditional combined portable rate, $185 ($80 concentrator + $105 portable add-on); oxygen generating portable equipment rate, $227.
In addition, AAHomecare believes the oxygen proposal under consideration by the Senate Finance Committee would save approximately $1 billion over 10 years, define services and patient protections along the lines of what is being discussed in the House oxygen reform proposal, keep inflation updates intact in future years and maintain oxygen as a competitively bid category.
Power Wheelchair Payment Improvement: This provision would eliminate the option for a wheelchair supplier to purchase a power-driven wheelchair with a lump-sum payment (except for complex, rehabilitative power wheelchairs). Though not contained in the framework document, AAHomecare believes the Finance Committee is looking to front-load monthly rental payments in the first few months of rental under the 13-month rental period.
Medical Device Manufacturers Fee: Under this proposal, an annual fee raising $4 billion would be imposed on the medical devices manufacturing sector beginning in 2010. The fee would be allocated by market share in the United States.
Durable Medical Equipment Outlier Payment Rule: This provision would reduce payments in non-competitive-bidding metropolitan statistical areas (MSAs) with spending levels that exceed a benchmark of 110 percent of the national average. MSAs above the benchmark would have payment rates reduced by an amount equal to 75 percent of the difference between its spending and the benchmark. This appears to allow CMS to apply competitive bidding rates in non-bid areas. [AAHomecare is seeking additional information to confirm this analysis.]
Accreditation Exemption: Small pharmacies would be exempt from the Oct. 1, 2009, DME accreditation requirement in Medicare.
Part B Productivity Adjustments: This provision would reduce payment updates for Part B providers by an estimate of increased productivity. We believe the effect of this proposal would be to reduce the CPI update for DME by about 1 percent each year. [AAHomecare is seeking additional information to confirm this analysis.]
Fraud, Waste, and Abuse: Fraud, waste, and abuse in Medicare and Medicaid would be reduced by a series of provisions to prevent and deter wasteful or fraudulent activity as well as assist in the identification and prosecution of such activity once it has occurred. These policies include: a new enrollment process for providers and suppliers, including an application fee; data matching and data sharing across federal health care programs; increased civil monetary penalties; increased authority to suspend payment during creditable investigations of fraud; and new procedures to disclose and repay overpayments.
Medicare Commission: This provision would establish an independent Medicare Commission (MC) that would submit proposals to Congress to extend Medicare solvency and improve quality in the Medicare program. Congress would have an opportunity to amend the proposal or pass an alternative proposal with an equivalent amount of budgetary savings. Should Congress not pass an alternative measure, the HHS Secretary would be required to implement the provisions included in the original MC proposal.
Minimum Benefits under Insurance Market Reforms: Provisions establishing the required benefits in the public insurance options DO NOT specify DME as one of the required benefits under insurance plans.
Baucus' complete framework document can be found in the "What's New" section of AAHomecare's Web site at www.aahomecare.org.
