House Narrowly Approves Budget Reconciliation Bill

WASHINGTON–Despite weeks of intense lobbying by the HME
industry, a measure that would cap Medicare rental of home oxygen
equipment and other DME is all but a done deal.

The House of Representatives narrowly approved the federal
budget reconciliation bill, which includes nearly $11 billion in
cuts to Medicare and Medicaid over five years, by a 216-214 vote
Wednesday. The Senate approved the bill late last year by a 51-50
vote. The measure, called the Deficit Reduction Act, is now
awaiting President Bush’s signature.

The $39.7 billion spending reduction bill passed mainly along
party lines, with 200 Democrats, one independent and only 13
Republicans voting against it. Four of those Republicans had
originally supported the bill in December, but changed their votes
to “no” last week.

The home care community was caught off guard by a last-minute
provision added to the bill in December that caps Medicare rental
of oxygen equipment at 36 months, then transfers title to the
beneficiary (see HomeCare
Monday, Jan. 9). The legislation also caps rentals of most
other DME, with the exception of power wheelchairs, at 13 months.
The DME caps will reportedly reduce Medicare spending by $700
million from 2006 to 2010.

While HME advocates were disappointed with the final vote, many
said they would continue to educate legislators on the issue and
look at ways to ease the effects of the mandate.

“All the home care stakeholders fought very hard in this battle
and the grassroots response was extremely powerful. The final vote
came down to the narrowest margin,” said Kay Cox, president and CEO
of the American Association for Homecare. “Now, AAHomecare will
evaluate options for legislative or regulatory action in the near
term, and we’ll also look at long-term solutions to home oxygen
reimbursement policy.”

Proponents of the oxygen rental cap say changing the payment
system from “perpetual” rental to “rent-to-own” is a needed step to
save money for Medicare and patients. But one of the major
arguments against the cap is that once a patient owns the
equipment, the provider is no longer responsible for maintaining
and servicing it.

According to AAHomecare, “ambiguous” language in the measure
regarding payments and maintenance of equipment raises questions
about what kinds of services home users will be able to count
on.

“The oxygen provision is eminently ill-conceived,” said Cara
Bachenheimer, vice president, government relations for Elyria,
Ohio-based Invacare Corp. “We have serious concerns about severing
the consumer’s relationship with the provider, particularly when
the consumer needs this life-sustaining prescription drug,
delivered via an FDA-regulated prescription device. We must work
with consumer and clinician organizations to make sure members of
Congress understand all the ill effects of this policy.”

The VGM Group said it is now shifting its focus to the
Hobson-Tanner bill, which would take the edge off some provisions
of competitive bidding (see HomeCare
Monday, Aug. 1, 2005). “We may have lost this battle, but
the war’s not over yet … We now must turn our attention to
persuading our representatives to co-sponsor and/or support H.R.
3559 (the Hobson-Tanner bill),” the buying group wrote on its Web
site. “We also must persuade those who do support H.R. 3559 to add
an amendment nullifying the industry-related items in the
just-passed Deficit Reduction Act.”

“I think our industry is always going to find a way, but this is
really going to impact patients on a pretty big scale,” said Cliff
Woolard, president of Concord, Calif.-based Home Med-Equip.

Woolard said he is not worried about the financial impact on his
business because over the past few years he has reduced delivery
expenses by focusing on systems that allow patients to fill their
own oxygen cylinders at home. “There’s no way anybody can make
[oxygen deliveries] and not lose their shirts,” he continued. “I
really think providers are going to go to [home filling systems] if
they want to stay in the business, or they’re going to have to
seriously consider how they’re going to limit service. And that
scares me.”

To view the text of the Deficit Reduction Act, also known as S.
1932, visit http://thomas.loc.gov.

To see how your member of Congress voted, visit http://clerk.house.gov/evs/2006/roll004.xml.