In Brief

CMS is planning a demonstration to test models of care management for high-cost Medicare beneficiaries. Hospitals, physician groups and integrated delivery systems with proposals to restructure or enhance management of care for those with costly medical conditions are invited to submit applications to CMS by Jan. 4, 2005. HME providers may apply as part of a consortium that includes the above entities. Four to six contracts will be awarded.

The Employee Benefits Research Institute found that more Americans are cutting savings to meet skyrocketing health care costs. In its 2004 Health Confidence Survey, the institute said about a quarter of those surveyed have reduced retirement savings to pay health care costs, and about 18 percent said medical bills make it more difficult to pay for necessities like food and housing.

Consumer-directed health options, instead of rigid long-term care programs, should be made available to more people with disabilities, according to a report from the National Council on Disabilities. Consumer-Directed Health Care: How Well Does It Work? stated that the government should move “from oversight of tightly defined program options to a broader responsibility … to assess consumer needs on an ongoing basis across disability groups and age categories.” These needs include more emphasis on the government’s “money follows the person” initiative, ensuring that funding follows the person wherever caregiving occurs, from institutional care to home care.

The fact that the MMA prohibits competitive bidding rates to be subject to administrative and judicial review could create problems for the DME industry as it prepares for competitive bidding in 2007, a health care attorney said. According to the Bureau of National Affairs, Alan K. Parver of the law firm Powell Goldstein, Washington, D.C., told attendees at the Medicare Part B Conference on Nov. 9, sponsored by the National Association of Chain Drug Stores Foundation, that waiving standard review processes gives CMS the authority to apply an area’s competitively bid rate to other areas without provider appeal, giving the government an “enormous grant of power.” He added that the issue may be re-examined on Capitol Hill next year.

HHS Secretary Tommy Thompson and CMS Administrator Mark McClellan said Congress will not likely cut Medicare spending to reduce the federal budget deficit in 2005. “I doubt very much [Congress is] going to touch anything that’s going to adversely impact on the drug benefit,” Thompson told reporters on Nov. 9, referencing the MMA’s prescription drug benefit that will take effect in 2006. To reduce spending, however, Congress has historically put Medicare on the chopping block, particularly provider payments — something that’s a possibility in 2005, according to industry observers.

Amazon.com is wading into the HME business. Recently the online giant began selling Andover, Mass.-based Philips Medical Systems’ HeartStart Home Defribrillator, now available over-the-counter to consumers.