Fate of NCB Lies in Conference, Experts Say

Washington

Pushing to resolve Medicare-reform legislation before the July 4 recess, both houses of Congress were poised to vote, at press time, on prescription drug bills that included dramatic provisions for the home care industry. In the House, the Rules Committee was working to combine two versions of a prescription drug package that included HME competitive bidding, before sending a reconciled bill to the floor for a vote. In the Senate, lawmakers were debating the final 11 proposed amendments to a prescription drug package that included a seven-year consumer-price-index freeze for durable medical equipment.

Final votes on these reform packages were slated to take place as early as June 26 in both the House and Senate. Neither the House nor the Senate version was likely to change significantly before these votes occured, and initial passage of both bills was all but assured, according to David Williams, director of government relations for Elyria, Ohio-based Invacare.

Consequently, the fate of home-care reform lies in the conference that soon will take place between representatives from the House and Senate, as the two sides try to agree on a final bill to send to the President.

“The Conference Committee could come up with a package in early- to mid-July,” Williams explained. “This whole thing is going to be done by August.”

Night and Day

When it comes to home-care reform, the House and Senate bills are as different as night and day. While both bills require the home care industry to endure cuts to help pay for a prescription drug benefit, the House version asks the industry to bear a disproportionate share of the cost burden, according to the Alexandria, Va.-based American Association for Homecare. Not only would the House version implement competitive bidding nationwide during a three-year phase-in period, but it also would reduce the home health market basket for three consecutive years and possibly add a home health copayment.

“It’s worse than [the competitive bidding provision the House passed] last year, Williams said. “It allows competitive bidding to be the foundation for ‘inherent reasonableness.’ The secretary [of the Health and Human Services Department] could do competitive bidding in Dade County, Fla., and use that pricing information to [support] an IR change across the country. It’s an ugly bill.”

The Senate version, on the other hand, would achieve approximately $7.7 billion in home-care savings during the next decade by freezing the CPI update for seven years. It also would reduce the Part B drug reimbursement from 95 percent to 85 percent of the “average wholesale price.” Unlike its sibling legislation in the House, however, the Senate version does not include a home health copayment or a market basket reduction for home health.

Initially, AAHomecare informed Congress that the industry was willing to accept a five-year CPI freeze, as an alternative to competitive bidding, but the association recently expanded that agreement to include a seven-year freeze. By avoiding competitive bidding, “the freeze would protect patient choice and access to quality DME and services — and help preserve thousands of small businesses and employee jobs,” the association wrote in ‘talking points’ posted on its Web site. Additionally, the savings that would result from the freeze would be “roughly the same amount as the proposed ‘competitive bidding’ program.”

On the issue of raising standards for DME providers, the two bills agree. The Senate version, however, goes further toward spelling out the details of these standards, requiring all Medicare DME suppliers to become accredited within three years of the bill’s passage.

Which Version Will Prevail?

For many reasons, the Senate version of the prescription drug package seems likely to prevail over its House counterpart during conference, experts say.

First, the Bush Administration June 19 sent a letter of support to the authors of the Senate’s bill, Sens. Bill Frist, R-Tenn.; Chuck Grassley, R-Iowa; and Max Baucus, D-Mont. “This bill is an important first step toward implementing many of the President’s principles for strengthening and improving Medicare,” the letter said. “The bill would provide beneficiaries with more options and better benefits, including long-overdue prescription drug coverage in Medicare.”

Second, the Medicare Payment Advisory Commission recently recommended that Congress continue the competitive bidding demonstration projects, to study the program further.

Finally, the seven-year freeze “gives immediate money to the Medicare program, whereas competitive bidding doesn’t realize savings until 2005,” Williams explained. “I’d say the odds are 60 [percent] to 40 [percent] in favor of the freeze over competitive bidding.”

61% of respondents to HomeCare‘s June Web Poll named the respiratory market as the HME industry’s most dominant. Seventeen percent named the mobility market, 16 percent named supplies, and 6 percent named beds and support surfaces.

For breaking news, go to www.homecaremonday.com, the electronic news service of the home medical equipment industry.