Obama Budget Lands DME Sucker Punch

WASHINGTON — With a proposal that would limit federal
Medicaid payments to Medicare’s competitive bidding rates,
President Obama’s 2012 budget left home care advocates reeling
after its Monday morning release. A second proposal would require
prepayment review for all power wheelchairs.

Overall, the administration budget would wrench a reported $62
billion from government health programs to offset a Medicare “doc
fix,” delaying a scheduled 25 percent physician pay cut until the
end of 2013.

Responding in an afternoon message to its members, the American
Association for Homecare said the budget tightens the squeeze on an
“already strapped” industry and “puts home medical equipment at
risk.”

As described in the budget:

“The Medicare program is in the process of implementing
innovative ways to increase efficiency for payment of durable
medical equipment (DME) through the durable medical equipment,
prosthetic, orthotic items or services (DMEPOS) competitive bidding
program, which is expected to save more than $17 billion in
Medicare expenditures over ten years.

“This proposal extends some of these efficiencies to
Medicaid, by limiting federal reimbursement for a state’s aggregate
Medicaid spending on certain DME services to what Medicare would
have paid in the same state for the same services.”

HME stakeholders have said the bid program’s Round 1
reimbursements — at an average 32 percent cut across nine
cities — are too low to maintain access, quality of equipment
and service. In September, 166 top economists warned CMS that its
bid
design would fail based on lowball bids resulting in rates
that, over the three-year contact term, would be unsustainable.

But agency officials have so far dismissed those concerns.
Bidding in Round 2 of the program, which will add 91 cities, is
planned for this year with implementation in 2013.

Tying Medicaid to competitive bidding rates would save the
government an additional $6.4 billion over the 10 years between
2012 and 2021, according to the budget.

AAHomecare President Tyler Wilson said the proposal “would be a
disaster for the already strapped HME sector. It would merely
accelerate the race to the bottom in terms of reduced access to
medically required home equipment and services and drive even more
qualified home medical equipment providers out of business.”

Industry estimates tally potential job
losses in the HME sector related to competitive bidding at
100,000.

“As it gets harder and harder to obtain quality equipment and
care at home,” Wilson continued, “this ill-conceived idea will
merely drive up costs in other parts of our health care system such
as hospitals, emergency rooms, and long-term care facilities.”

Power wheelchairs take another hit

AAHomecare also condemned a proposal in the president’s budget
that would require prepayment review for all power wheelchairs.

The administration said the requirement would ensure that claims
“meet the existing criteria for coverage.” (A December 2009 report
from HHS’ Office of Inspector General found three-fifths of PWC
claims failed
to meet Medicare documentation requirements during the first
half of 2007.)

The association, however, said this budget proposal “heaps
additional burdens on power wheelchair providers who are already
reeling from severe reimbursement cuts, the
loss of the first-month purchase option, and numerous, onerous
regulations that second-guess physicians’ orders for power
wheelchairs for seniors and people with disabilities.”

While it is only the beginning salvo in what promises to be a
lengthy battle over the nation’s spending, AAHomecare said “the
president’s budget proposes steep cuts in Medicare, which puts home
medical equipment at risk.”

What’s more, the association pointed out, Republicans are
working on their own budget, which “is likely to include even
steeper cuts to federal spending.”