DME Targeted on List of Cuts to Pay for Health Reform

WASHINGTON–Yesterday, the Senate Finance Committee released a
list of revenue options for financing health care reform and, no
surprise, reimbursement reductions for home medical equipment were
listed as a potential option.
 
A subsection of the long document from the committee, titled
“More Appropriate Payment for Durable Medical
Equipment,” describes the fee-schedule pricing mechanism used
for Medicare DME and outlines proposed options for revising DME
payments:
 
“The Office of Inspector General (OIG) at the Department of
Health and Human Services has identified potentially overvalued DME
items and services; some contend reimbursement for certain DME
items and services are under-reimbursed. The committee will explore
options to improve payment accuracy for DME items and
services.”
 
In an April congressional hearing, HHS Inspector General Lewis
Morris told a Senate Homeland Security subcommittee that his office
had previously found that “Medicare pays too much for certain
pieces of DMEPOS and related supplies, such as power wheelchairs,
hospital beds, diabetic supplies, and home oxygen
equipment.”
 
For example, Lewis said, in a 2006 report the OIG found that
Medicare had allowed, on average, “$7,215 for the rental of
an oxygen concentrator that costs about $600 to purchase new.
Additionally, beneficiaries incurred, on average, $1,443 in
coinsurance charges. We determined that if home oxygen payments
were limited to 13 months rather than the current 36 months,
Medicare and its beneficiaries would save $3.2 billion over five
years.”
 
Lewis noted the OIG was also examining reimbursements for
wheelchairs and negative pressure wound therapy pumps.
  
Although the Finance Committee document does not propose specific
cuts to HME, a press release issued by Senate Finance Chairman Max
Baucus, D-Mont., and Ranking Member Charles Grassley, R-Iowa, makes
a specific reference to ensuring “appropriate payments”
for oxygen and power wheelchairs.
 
In response, an alert from the American Association for
Homecare asks HME providers to remind Congress that the HME sector
“has already suffered unwarranted and disproportionately
large cuts in recent years.”
 
According to Tyler Wilson, AAHomecare president, “Further
reductions to home medical equipment reimbursement will tear the
already fragile safety net provided by home care. Home medical
equipment and care helps reduce the length of expensive hospital
and institutional care, allowing people to remain in the comfort of
their own homes.”
 
Read the Senate Finance Committee
press release.