Chairman’s Mark Draws Fire

WASHINGTON — Reaction to the “Chairman’s mark” version of
the Senate Finance Committee’s health care reform bill, released
Wednesday by Chairman Max Baucus, D-Mont., has been mixed.
Democrats don’t like it and Republicans don’t like it a lot.

Neither does the American Association for Homecare.

Called the America’s Healthy Future Act, the 220-page bill does
not include the so-called “public option” pushed by President
Barack Obama. Nor does it include any specific cuts to oxygen,
although the association warned “the threat of cuts remains.”

The bill, does, however, include deep cuts to Medicare and a
number of provisions that would affect home medical equipment,
among them speeding up and expansion of the competitive bidding program,
elimination of the first-month purchase option for standard power
wheelchairs, an excise tax on medical device manufacturers and
anti-fraud measures.

“While we favor the goals of health care reform and aggressive
measures to reduce fraud and waste in Medicare, the cuts proposed
for home medical are unwarranted and disproportionate,” said Tyler
J. Wilson, AAHomecare president. “We don’t believe the cuts will
produce either savings or better care for seniors in the long
run.”

The association’s outline of provisions that would impact HME
follows:

Competitive Bidding Program Expansion. The
Chairman’s mark would expand the number of areas to be included in
Round 2 of the bid program from 79 of the largest MSAs to 100 of
the largest MSAs, expanding the target list of areas by the next 21
largest population MSAs. The provision would also require that the
bid program apply competitively bid rates to the remaining non-bid
areas by 2016. All other provisions in current law would remain in
place, such as the authority of the HHS secretary to exempt rural
areas and areas with low population density within an MSA.

First-Month Purchase Option for Power
Wheelchairs. The mark would maintain the first-month
purchase option for complex power wheelchairs but eliminate the
option for standard power wheelchairs. There is an additional
provision that would eliminate the first-month purchase option for
replacing a wheelchair for all chairs except complex rehabilitative
power wheelchairs.

Oxygen Therapy. The mark does not include
specific provisions related to oxygen at this time.

Excise Tax on Manufacturers and Importers of Medical
Devices. The Chairman’s mark would require an annual tax
on manufacturers and importers of medical devices that are
categorized as Class II or Class III devices offered for sale in
the United States, costing device manufacturers approximately $29.9
billion over ten years. The tax would be apportioned among the
covered entities each year based on each entity’s relative market
share of covered domestic sales for the prior year.

Productivity Adjustment. The mark provides for
updates based on the market basket or CPI minus full productivity
estimates for all Part A and B providers who are subject to a
market basket or CPI update. AAHomecare believes this would reduce
the DME annual CPI update by the full productivity adjustment for
all DME providers who are subject to a CPI update beginning in 2011
and that productivity adjustments would apply only to items and
services that are not subject to competitive bidding.

Accreditation Exemption for Certain Pharmacies.
The mark would exempt certain pharmacies from DMEPOS
accreditation.

Elimination of Additional Payment in 2014. In
2014, DMEPOS items and services will not receive an additional 2
percent increase above the scheduled Consumer Price Index-Urban
(CPI-U) fee schedule inflation update. The Chairman’s mark
maintains the CPI-U update in 2014 but eliminates the 2 percent
additional increase.

Anti-fraud and Abuse. The Chairman’s mark
contains a number of anti-fraud provisions related to HME providers
and others providers:

• Provider Screening. The Chairman’s mark would
  require screening of all providers and suppliers before granting
  Medicare billing privileges. All providers and suppliers would be
  subject to licensure checks. Certain groups would be subject to
  additional screening measures such as submission of fingerprints,
  criminal background checks, multi-state database inquiries, and
  unannounced site visits.

• Enrollment Application Fees. An application fee
  of $350 would be imposed on providers and suppliers to cover the
  costs of screening. Current providers could be subject to a
  discounted screening fee of $250 if they pay it within 12 months of
  enactment.

• Enrollment Disclosure Requirements. The
  Chairman’s Mark would impose new disclosure requirements on
  providers and suppliers enrolling in Medicare. Applicants would be
  required to disclose affiliations with any enrolled entity that has
  uncollected Medicare or Medicaid debt. The Secretary would be
  authorized to deny enrollment in Medicare if these affiliations
  pose an undue risk to the program.

• Surety Bonds. The Secretary would be authorized
  to require surety bonds up to $500,000 (the amount of the surety
  bond would be commensurate with the volume of billing) and, if
  necessary, impose moratoria on the enrollment of certain groups of
  new providers or suppliers to prevent fraud.

• Face-to-Face Exam. As a condition of payment,
  physicians must have a face-to-face encounter with the patient
  before making a referral for home health or durable medical
  equipment.

• Payment. The maximum period for submission of
  Medicare claims would be reduced from 36 months to not more than 12
  months. Also, the Secretary, in consultation with the HHS Office of
  Inspector General and CMS, could suspend payments to providers and
  suppliers pending an investigation of credible allegations of
  fraud.

• Overpayments. The 60 days providers and
  suppliers have to repay Medicare overpayments would be modified to
  either 60 days after the date on which the overpayment was made or
  the date the corresponding cost report is due. Providers and
  suppliers would be required to repay any Medicare or Medicaid
  overpayment identified through an internal compliance audit.

To view the bill in its entirety, click here.