Bipartisan Rural Relief Bill Introduced in House

Washington, D.C. (May 12, 2016)—The highly anticipated companion bill to S. 2736, the Patient Access to Durable Medical Equipment (PADME) Act, was introduced in the House of Representatives on Thursday, May 12, 2016. H.R. 5210 was introduced by Representatives Tom Price, M.D. (R-Ga.) and Dave Loebsack (D-Iowa). This bill has gathered broad bi-partisan support as it has been introduced with 40 original co-sponsors including Reps. Cathy McMorris Rodgers (R-Wash.) and Tammy Duckworth (D-Ill.).

The introduction of this legislation comes as many providers prepare for the approaching additional cut to reimbursement rates, which averages around 25 percent, in non-competitive bidding areas affecting predominantly rural America.

Late in 2014, the Centers for Medicare & Medicaid Services (CMS) announced that the Competitive Bidding Program would be expanded nationwide to small towns and rural areas in two phases beginning January 1, 2016. This applied competitively bid rates in large, metropolitan areas to rural non-competitively bid areas without accounting for the entirely different business models between the two areas. As a result, providers in rural America faced the first of two 25 percent cuts to the prior fee schedule, with the second phase of the cuts scheduled to occur on July 1, 2016.

VGM Group, Inc. has been working to mitigate these cuts by coordinating its membership of independent durable medical equipment providers in an effort to gather support from Congress. Along with other key industry stakeholders, such as AAHomecare, VGM and its membership have created a strong grassroots effort to bring awareness of the threat to patient access to medical equipment such as oxygen, hospital beds and wheelchairs. Providers have hosted in-district congressional meetings at provider’s stores, testimonials at hearings conducted by the Small Business Administration and sent thousands of messages to Congress through.

John Gallagher, vice president of Government Relations for VGM, said, “We are extremely proud of our members who have remained determined and engaged to gather support for this legislation, which will provide for a 15-month freeze to current Medicare reimbursement rates. Final passage of this legislation will give the industry time to work with an entirely new administration in 2017 to agree on a long-term solution ensuring that patients in rural America have access to quality medical equipment. “

Providers affected by the expansion of competitive bidding are largely located in sparsely populated areas in comparison to the large, metropolitan competitively bid areas. Providers in rural America have entirely different business models in order to account for their large service area size and decreased population of patients to serve. It is not uncommon for rural providers to travel 100 miles one way to deliver and service medical equipment in a patient’s home, which is unaccounted for in the expansion of competitive bidding.

Loebsack has joined Price in the introduction of this legislation in an effort to maintain that rural Americans have access to quality medical equipment. “Since the beginning of the health care debate, my number one priority has been to ensure that Iowans have access to quality, affordable and comprehensive care. As part of their care, many Iowans rely on durable medical equipment (DME) on a daily basis. In the near future, severe cuts to the reimbursement rate of DMEs will restrict Iowans’ access to this needed equipment. I am pleased to join my colleagues to help introduce the Patient Access to Durable Medical Equipment Act, bipartisan legislation that will delay these cuts while allowing DME providers to continue providing Iowans with the resources they need to live happy, healthy lives,” said Loebsack.

The PADME Act will allow legislators and industry stakeholders to craft a suitable long-term solution to ensure that the millions of people living in rural America will continue to have access to quality medical equipment.

The PADME Act, H.R. 5210, is led by Reps. Price and Loebsack, in addition to 39 other bi-partisan original co-sponsors. The Senate companion bill, S. 2736, is led by Sens. John Thune (R-S.D.) and Heidi Heitkamp (D-N.D.) and 22 additional bi-partisan co-sponsors and will offer rural DME suppliers relief in the following ways:

• Extension of the current phase-in rate of 50 percent of the previous fee schedule rate and 50 percent of the new competitively bid rate until October 1, 2017. Meaning, there will be no additional cuts to DME providers in rural areas until October 2017.
• Adjustment of the bid ceiling set by the Competitive Bidding Program by setting the bid ceiling at the FY 2015 fee schedule rate and adjusting it for inflation. This eliminates the artificial ceiling from the previous round of bidding, which has a continuous downward pressure on prices.
• Requirement of CMS to consider and account for the different business models of non-competitively bid areas such as the travel distance, costs associated with furnishing DMEPOS items and services within a region, the highest amount bid by a supplier that was awarded a contract and the number of providers in CBAs compared to the number of providers in non-CBAs for future payment rates.

Requirement of CMS to publish a monthly report of the results to allow for Congress to monitor in order to ensure that Medicare beneficiaries are not adversely impacted by CMS’ regulations.

Visit vgm.com for more information.