Democrats’ Medicare Bill Cuts PWC, Home Oxygen Payments

WASHINGTON–Late Friday, Montana Democrat Max Baucus, chairman
of the Senate Finance Committee, filed a Medicare bill with a
“doc fix” provision that would stop a 10 percent pay
cut for physicians currently set to take effect July 1. But the
bill also contains reduced payments for standard power wheelchairs
and home oxygen.

Senate Democrats and Republicans have each crafted their own
plans for Medicare legislation to halt the physician pay cut, but a
summary of the Republican bill, also released Friday by Sen.
Charles Grassley, R-Iowa, contains no cuts for home care.

“Sen. Baucus’ proposal contains a very harmful provision
that would eliminate the first-month purchase option for standard
power wheelchairs,” according to Seth Johnson, vice president
of government affairs for Pride Mobility Products, Exeter, Pa. He
noted the provision is different than that contained in last year’s
CHAMP Act, which would have eliminated the option for all PWCs.

“This provision would exempt complex rehab from that
change, and would also accelerate the rental payments for standard
power to the tune of 15 percent per month for months one through
three,” Johnson explained. “Essentially, providers
would get 45 percent of the total within 90 days, and then the
remaining amount would be paid out in months four through
13.”

But even under that proposal, Johnson said, Medicare would
“still pay more under this change than they would maintaining
the current purchase option. It still nets out to 105 percent of
the fee schedule, so we’re continuing to question how Medicare
would save money under this provision.

“If you look at the typical beneficiary who receives these
chairs,” he continued, “they have long-term chronic
conditions and … a review of historical data for Medicare
claims shows that beneficiaries provided a power wheelchair 92
percent of the time use it 13 months or more, so 8 percent have a
short-term need less than 13 months.”

The Baucus bill also includes a cut for home oxygen under which
stationary payment rates would decrease from the current $198 per
month to $144, according to Cara Bachenheimer, senior vice
president of government relations for Invacare, Elyria, Ohio.

But “the legislative language is very unclear,” Bachenheimer
said, so the following summary of oxygen provisions is based on
conversations with Capitol Hill staff:

–For patients receiving stationary and traditional (e.g.,
delivered tanks) systems, providers would be paid a total of $122
per month compared to the current $132 payment rate. New oxygen
technology, defined as transfilling systems and portable oxygen
concentrators, would stay at the current payment rate of about $250
per month. Bachenheimer added that these are the rates for the
first 36 months of payment.

–In addition, the Democrats’ proposal would also repeal the
mandatory title transfer provisions of the 2005 Deficit Reduction
Act, which automatically transferred ownership of oxygen equipment
to the beneficiary after the rental period expired. Under the
proposal, equipment provided under competitive bidding contracts
entered into prior to Sept. 1, 2008, would not be subject to this
payment change.

–Finally, the proposal would require the Institute of Medicine
to do a study within 18 months on the current payment system based
on classes of equipment, and the adequacy of payment for equipment
and services.

Bachehheimer said she expects “further clarification in the
coming days” on the full proposal.

Johnson added the Senate’s Medicare package is still a
“fluid process.

”Largely what we are seeing right now is a lot of
political grandstanding, and at some point, Sens. Baucus and
Grassley will have to come together and work on a package that can
pass the Senate and be signed by the president. The Senate will
have to work on a bill that they can get through to address the
looming cut in physician payments, which continues to drive this
Medicare legislation.”

Baucus said he expects to move the bill to the Senate floor this
month.