Home Care Groups Blast Oxygen, PWC Cuts in Bush Budget
WASHINGTON–Last Monday, President Bush released a $3.1 trillion
budget plan for fiscal 2009 that, if approved, would cut Medicare
and Medicaid spending by $200 billion–with some of those cuts
coming from HME.
The blueprint–President Bush’s last and most expensive to
date–would slash Medicare by $182.7 billion over the next five
years and cut Medicaid by $17.4 billion. As in last year’s
proposal, the budget would specifically reduce the home oxygen
rental cap from its current 36 months to 13 to save an estimated $3
billion over the five-year period. It would also eliminate the
first-month purchase option for power wheelchairs to save $720
million in that time frame.
Not surprisingly, industry reaction to the news was not
positive.
A response from the American Association for Home Care blasted
the plan, which it said would “weaken the nation’s home care
infrastructure.”
“Home care delivers value for every health care dollar, and it
is clinically effective and preferred by patients and families,”
said Tyler J. Wilson, AAHomecare president. “These proposed cuts
show a complete disregard for the nation’s home care safety net.
Some of the reimbursement mechanisms in Medicare should be improved
so they align better with beneficiaries’ needs. However, these
proposed cuts do not improve Medicare and would be bad for patients
and providers alike.”
AAHomecare said elimination of beneficiaries’ option to purchase
a power wheelchair in the first month “would reduce beneficiary
access and increase costs to Medicare, requiring durable medical
equipment companies to provide financing for a patient’s
wheelchair.”
In essence, that would render providers as “lending institutions
for the federal government,” the association said. “If the
first-month purchase option is eliminated, access to wheelchairs
will decrease since providers will not be able to secure the
financing to cover the costs of the power wheelchair over a
13-month period.”
In addition to shortening the oxygen rental period, AAHomecare
pointed out the phrase “and revise the monthly payment amount” was
added in the budget text, “which suggests the administration
proposes an oxygen rate cut in addition to the shorter rental
period.”
The Council for Quality Respiratory Care, a coalition of 11 home
oxygen providers and manufacturers, echoed concerns regarding the
budget’s oxygen provision. CQRC contends that between competitive
bidding and policy changes scheduled for Jan. 1, 2009–when the
first beneficiaries will assume ownership of their equipment under
the Deficit Reduction Act–oxygen therapy can’t afford any
additional hits.
“It is difficult to imagine how we would accommodate patient
needs with these newly proposed cuts, especially as we struggle to
wholly grasp the depth of the unprecedented funding cuts already
before us,” said Peter Kelly, CQRC chairman. “Balancing the federal
budget at the expense of vulnerable patients is just bad
policy.”
A statement from Invacare noted new oxygen technology such as
home transfilling equipment and portable concentrators would likely
be exempt from the budget proposal. But the Elyria, Ohio-based
manufacturer also acknowledged the potential longevity of the
provisions targeting HME. According to Invacare, providers can
expect those cuts to stay on the table, especially with the
approaching deadline for the Medicare “doc fix.”
“With regards to Medicare, Congress will pick up its Medicare
proposals where it left off in December 2007, when it could gain
the votes to pass only a bare bones Medicare package whose primary
purpose was to stave off a Medicare payment cut for physicians
until June 30, 2008. In the next few months, Congress will continue
its consideration of a Medicare package, which is likely to include
oxygen and power wheelchair cuts, though not the same as those
proposed by the administration,” Invacare said.
In explaining the budget, HHS Secretary Mike Leavitt pointed out
reductions must be made or Medicare will be bankrupt in 11 years.
“American sensitivity to entitlement warnings has become numbed by
a repeated cycle of alarms and inaction. Dire warnings have become
a seasonal occurrence, like the cherry blossoms blooming in April,
part of life’s natural rhythm. This must change. There are those
who will be unhappy with this budget, but given the Medicare system
we have, putting off solving the problem is no longer an
acceptable,” Leavitt said in a Monday afternoon press
conference.
CMS data shows that, in the past 25 years, Medicare spending has
grown from $52.6 billion in 1983 to an estimated $396.3 billion in
2008, a 7.5-fold increase. Currently, the program consumes 16 cents
of every federal dollar spent and is third only to Social Security
and defense spending. In 2009, funding for total Medicare spending,
which will cover 45.5 million Americans, is expected to be nearly
$425.5 billion.
While the HME sector represents only about 1.7 percent of
Medicare’s total spending and is the slowest-growing sector in the
program, Leavitt said net savings from the entire budget proposal
would slow the program’s annual growth rate from 7.2 percent to 5
percent.
Despite possible repercussions of the Bush budget, Washington
insiders said the Democratic Congress is not likely to support the
plan. Already, House Speaker Nancy Pelosi, D-Calif., has said the
proposal is in stark contrast to the budget Congress will offer in
the coming weeks.
In fact, according to Seth Johnson, some congressional aides
were even calling the president’s budget DBA, or “dead before
arrival,” as details leaked out before its presentation last week.
However, he warned, the threats to oxygen and PWCs aren’t going
away. “We’re certainly in for another battle this year” as Congress
fashions a Medicare package and must address the physician payment
issue before June 30, he said.
“Once again that’s the driver here,” continued Johnson, vice
president of government affairs for Pride Mobility Products,
Exeter, Pa. “We built a strong grassroots advocacy effort that
helped the outcome in [avoiding these cuts] last year. I’m
confident we can do the same thing this year as long as we take
advantage of the groundwork we laid, but we really only have the
spring and into the early part of the summer to do it.”
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