WASHINGTON — House Democrats moved another step closer to revamping health care with the Oct. 29 release of H.R. 3962, dubbed the "Affordable Health Care for America Act." While most Americans focused on the hotly debated public insurance option, home care advocates were caught off guard by a provision that instructs the Government Accountability Office to evaluate the establishment of a competitive bidding program for DME manufacturers.
The proposal — buried within Section 1149 of the 1,990-page bill — "is a new addition to the House bill and is not in the current version of the Senate health reform legislation," said Seth Johnson, vice president of government affairs for Pride Mobility Products, Exeter, Pa. "It would require the GAO comptroller to conduct a study to evaluate the potential establishment of a program to acquire DME and supplies through a competitive bidding process among manufacturers of such equipment and supplies. The GAO report is due to Congress within 12 months of enactment of the bill."
According to the National Association of Independent Medical Equipment Suppliers, the concept is similar to a program being used in California for incontinence products. "The basic concept is that manufacturers would bid to supply a selected product. Suppliers would be paid this fee and would buy the product from the manufacturers at a price that is below the bid fee," NAIMES reported, noting that House Ways and Means Committee staff had brought up the issue in discussions with the group earlier this year.
Michael Reinemer, vice president, communications and policy, for the American Association for Homecare, pointed out that the legislation is not actually proposing manufacturer bidding at this point. Instead, Reinemer reiterated that the bill merely proposes that the idea be considered. AAHomecare has scheduled a meeting with House committee staff to learn more about the proposal.
In a Thursday afternoon update, AAHomecare reported that the GAO study mandated by the bill would encompass the following topics:
-
Identification of types of DME and supplies that would be appropriate for bidding under such a program.
-
Recommendations on how to structure such an acquisition program to promote fiscal responsibility while also ensuring beneficiary access to high quality equipment and supplies.
-
Recommendations on how such a program could be phased in and on what geographic level would bidding be most appropriate.
-
In addition to price, recommendations on criteria that could be factored into the bidding process.
-
Recommendations on how suppliers could be compensated for furnishing and servicing equipment and supplies acquired under such a program.
-
Comparison of such a program to the current competitive bidding program under Medicare for durable medical equipment, as well as any other similar Federal acquisition programs, such as the General Services Administration's vehicle purchasing program.
-
Any other consideration relevant to the acquisition, supply, and service of durable medical equipment and supplies that is deemed appropriate by the Comptroller General.
AAHomecare also reported that Section 222 of the bill states that DME, prosthetics, orthotics and related supplies are now included in the minimum essential benefits package that qualified health insurance plans must cover. The association had lobbied for inclusion of HME in the minimum benefits package.
Additional analyses from AAHomecare, NAIMES and VGM Group also noted the bill:
-
Implements annual productivity adjustments (reductions) for "certain DME" beginning in 2013, but "certain DME" was not defined. AAHomecare said additional HME CPI reductions that had earlier been proposed by Rep. Gene Green, D-Texas, do not appear to be contained anywhere in the bill.
-
Adds an option for Medicare beneficiaries to take ownership of Group 3 support surfaces after the 13-month capped rental period ends. The option must be offered in the 10th month. If rental is chosen, suppliers are required to provide and support the item for the remainder of the useful life (five years) at no charge to Medicare. Unspecified service and maintenance would be paid.
-
Requires that a supplier who provides oxygen to a patient during the 27th month is required to provide the equipment through the 60th month regardless of circumstances or location. According to NAIMES, this change "effectively moves the commitment to the patient from the 36th month to the 27th month while leaving the cap at 36 months. It specifically states this, regardless of circumstances, unless another supplier has accepted responsibility through the 60th month."
-
Establishes rules that would restart the 36-month rental period for oxygen if the supplier goes bankrupt after 24 months of payments have been made for the patient.
-
Except for competitive bidding, exempts pharmacies only from accreditation if they only provide diabetic suppliers, canes and crutches. Some restrictions apply.
-
Adds a 2.5 percent excise tax on the sale of medical devices (products sold at retail stores would be exempt). The proposal, which would raise approximately $20 billion, is similar to one in the Senate Finance Committee's health reform bill, but the Senate version levies a fee on the medical device manufacturers themselves. (See Manufacturers Marshal Forces to Battle $40 Billion Tax, Sept. 21.)
Pride's Johnson also confirmed that elimination of the first-month purchase option for standard power wheelchairs is included in the House bill, a move that experts expected and one industry advocates continue to fight.
"The provision does provide for an exemption of the Round 1.2 competitive bidding areas where contracts are entered into by Oct. 1, 2010," said Johnson, adding: "The industry remains focused on securing a budget-neutral alternative that would preserve the purchase option prior to final passage of the bill."
H.R. 3962's estimated cost of $894 billion over 10 years squeaks in just under President Obama's stated goal of staying under $900 billion. The House will likely consider the bill in earnest as early as the middle of next week, and vote on final passage prior to Veterans Day (Nov. 11).
Congressional Quarterly reports that the legislation would be "paid for largely by a surtax on the adjusted gross income of individuals making more than $500,000, and married couples making more than $1 million. The bill contains new revenue-raisers that would impose tax-compliance requirements on businesses and create a 2.5 percent excise tax on certain medical devices."
View a PDF of the Affordable Health Care for America Act.
View more competitive bidding stories.
