Fate of Last-Minute Cuts to HME Uncertain

WASHINGTON–Unable to settle on a Medicare package last week,
the House of Representatives threw up its hands, tossing the hot
potato to the Senate. The move could ultimately benefit HME
providers, some Washington insiders said.

“What’s promising is that the House has punted [the Medicare
reform package] over to the Senate and said, ‘You put it to
together,’” said John Gallagher, vice president of government
relations for Waterloo, Iowa-based VGM, noting that a Senate
version of the legislation “would be more beneficial to the
industry than what would be coming out of the House.”

Whether the Senate can beat out a package that will be approved
by both parties in Congress before legislators adjourn on Friday
for the rest of the year–and whether it can craft one the
president will sign–is uncertain. Senate Finance Committee
Chairman Max Baucus, D-Mont., said last week it was possible that
Medicare legislation “may be pushed off until next year.”

Cara Bachenheimer, senior vice president, government relations,
for Elyria, Ohio-based Invacare, said Friday “the fate of a
Medicare package this year remains highly questionable.”

But what happens is of crucial import to the HME industry.

For months, Congress has attempted to come up with a Medicare
reform package including reauthorization and expansion of the State
Children’s Health Insurance Program. Under a “pay as you go”
mandate, legislators also have been frantically searching for funds
to avert a 10 percent reduction in physician fees set for Jan. 1.
Among the suggested ways to pay for the so-called “doc fix”: home
oxygen and power wheelchair reimbursement cuts.

While President Bush vetoed the latest version of the SCHIP
reauthorization bill on Wednesday, the threat to HME remains,
Bachenheimer said.

“No question, oxygen and power wheelchair provisions are on the
table, at risk,” she said.

The House measure calls for the current oxygen rental cap to be
reduced from 36 to 18 months (new technology would be exempt) and
elimination of the first-month purchase option for power
wheelchairs.

The Senate version is rumored to ditch the oxygen cap reduction
and instead propose a reimbursement cut of anywhere from $30 to $70
for stationary oxygen concentrators (new technology would not be
included in the cut). It would eliminate the first-month purchase
option for power wheelchairs but would carve out complex rehab.

“In short, we now have a Medicare package from the House and an
‘informal’ Medicare package from the Senate,” Bachenheimer said in
an update from Washington. “The Senate package has not been
publicized, has not been subject to Finance Committee approval, nor
has it passed the Senate. These are unusual dynamics, making the
House-Senate negotiation process fairly secret.” She added that
those negotiations could run through the weekend and into the early
part of this week.

Bachenheimer also said that because of the brief period Congress
has left before its Christmas recess, “the Medicare bill must be
attached to a legislative vehicle that is a ‘must-pass’ piece of
legislation or it is unlikely to move this calendar year.”

Bachenheimer said the bill could be a part of a “small, one year
or less, ‘doc-fix’ bill … A six-month doc-fix bill is possible,
punting the issue to next year’s Congress to resolve.”

Another stumbling block is the threat of a presidential veto.
Earlier this month, President Bush told lawmakers he would veto any
Medicare package employing managed care cuts or drug benefit cuts.
Both the House and the Senate packages rely on cuts to managed-care
programs as a means to finance their plans, Bachenheimer said.

“Therefore, even if the Congress passes a Medicare bill, it
remains to be seen whether President Bush will veto it,” she
said.

Because nothing is yet set in concrete, both Bachenheimer and
Gallagher stressed now is the time for HME providers to lobby
legislators for no cuts to oxygen or power wheelchair
reimbursement.

“We have got to get people fired up, on the phone with members
of Congress and particularly members of the Senate,” Gallagher
said.

“We are working very diligently with our Senate allies to get
oxygen and power wheelchairs off the list, or at least get the
oxygen payment reduction decreased significantly,” Bachenheimer
said. “If the Medicare package doesn’t happen before Congress
recesses, it will come back early in 2008, and our fight will
continue to ward off these proposed cuts.”