Grassley’s DME Cuts Don’t Make the Cut

Washington

Senate Finance Committee Chairman Charles Grassley, R-Iowa, has made no secret of the fact that rural health reimbursements are his top priority. Last month, he kept a promise to introduce legislation to help rural Medicare providers “at every opportunity.” But Grassley’s plan came at a cost — and, under the provisions of a recent amendment, the durable medical equipment industry was slated to bear some of that cost.

Not waiting for a health-care-related bill to come along, Grassley added a $25 billion rural health care amendment to the Senate’s tax bill, and included two DME cuts to offset the expense. The first cut would freeze consumer-price-index increases for DME for 10 years. The second would reduce reimbursements for Medicare Part B drugs, from 95 percent of the “average wholesale price” to 85 percent of AWP.

On May 15, the Senate approved the amendment as part of a $350 billion tax cut bill. But the measure died in a conference between House and Senate negotiators, who hammered out a tax-bill compromise the week before Memorial Day.

While CPI freezes are not new to the DME industry — Congress enacted a five-year freeze as part of the Balanced Budget Act of 1997 — they are new in the context of recent reimbursement debates, which have centered on the prospect of national competitive bidding. At the end of last year, the BBA freeze expired, opening the door to CPI increases of 2 to 3 percent per year, according to Tom Connaughton, president of the Alexandria, Va.-based American Association for Homecare. But “a 10-year freeze is a long freeze,” he said, adding that such a freeze would be unacceptable to AAHomecare.

Despite this initial defeat, Grassley has vowed to fight for his amendment at every turn. “Sen. Grassley has been involved in the issue of rural health care reform for a long time,” his spokeswoman said. “If he needs to keep pushing for Medicare fairness when [lawmakers] work on Medicare legislation, then he will.”

Grassley may soon get a second shot at passing the amendment. Both Senate Majority Leader Bill Frist, R-Tenn., and House Speaker Dennis Hastert, R-Ill., have promised a debate on Medicare-reform legislation before the July 4 recess.

As of press time, Congress seemed poised to approve a $320 billion compromise tax bill that included $20 billion in relief funds for states. Half of the $20 billion was slated to go directly to state Medicaid programs.

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