Hobson Drafts Legislation To Repeal 2005 Reimbursement Cuts

Washington

A U.S. Representative plans to introduce legislation that would repeal 2005 reimbursement cuts for some DME products and oxygen.

The Medicare Modernization Act (MMA) implements the cuts next year for manual and power wheelchairs, nebulizers, diabetic supplies, air mattresses and oxygen. Cuts will be based on an Office of Inspector General (OIG) report on Federal Employees Health Benefits Plan (FEHBP) median pricing and a forthcoming OIG report on home oxygen and oxygen equipment.

But Rep. David Hobson, R-Ohio, said he wants to stop the cuts from happening. In a letter to House Speaker Dennis Hastert, R-Ill., and Rep. Bill Thomas, R-Calif., former chairman of the Medicare Conference, Hobson said he planned to draft legislation to rescind the reimbursement-cut provision in MMA.

“I continue to believe that the upcoming [reimbursement] reduction is inappropriate,” Hobson wrote. “The OIG admits that the FEHBP data for [its median pricing] report was limited. While there are 200 FEHBP plans, the OIG requested information from only 58 plans, and only 30 plans responded, and not with the information related to all the DME items requested. Further, price comparisons between FEHBP plans and Medicare are inappropriate because FEHBP plan enrollees are generally young and healthy, compared to a more frail and elderly Medicare beneficiary population. The OIG also admits that, ‘this limited study was not designed to meet the rigorous IR [inherent reasonableness] standards for revising Medicare payment rates.’

“For these reasons, I strongly believe that this is an inappropriate reduction, which will limit Medicare beneficiaries’ access to DME,” Hobson continued. “This is particularly worrisome because DME is often an important component in allowing beneficiaries to continue to live independently in their homes.”

Shortly after Congress reconvened April 20, the legislation was still in draft form but had been completed, according to a Capitol Hill source. Once the legislation is formally introduced, “we’ll all be drumming up support,” said Kay Cox, president and CEO of the American Association for Homecare.

At AAHomecare’s Leadership Conference earlier this year, Tom Scully, former CMS administrator, called inclusion of the FEHBP-based reimbursement cuts in the Medicare reform package “bad luck, bad policy or a combination of both.”

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