ATLANTA — Last week's election of Sen. Barack Obama as the next president of the United States and a stream of new Democrats in both the House of Representatives and the Senate could bode well for the home medical equipment industry—or not.

With the 9.5 percent reimbursement reduction set to strike 10 product categories Jan. 1 and implementation of the 36-month rental cap on oxygen the same day—not to mention the continuing threat of competitive bidding—the lives of many HME businesses and the fate of thousands of beneficiaries hang in the balance, advocates said.

Who Obama names to head up the Department of Health and Human Services and the Centers for Medicare and Medicaid Services, and how he and the new Congress deal with the issue of health care and perceive the industry will determine which way the balance beam swings.

"Many feel we dodged a bullet," said John Gallagher, vice president of government relations for Waterloo, Iowa-based VGM during the member services group's Lunch Bucket legislative update on Friday. "There wasn't the full sweep [of Democrats] that was projected … In our industry, a divided government is always best."

Democrats had hoped to amass a filibuster-proof presence in the Senate of 60 or more. As of press time, three seats in that chamber were still in question, but few, if any, political pundits expected the number to hit the magic 60. "We'll need that filibuster [ability]," Gallagher said, looking ahead to numerous HME issues that are expected to surface in the legislature next year. With retention of the ability to filibuster, it is less likely, he said, that something could be "ramrodded through" that would be onerous for the industry.


Still, having a Democratic majority could be helpful to HME, according to some.

"With more Democrats, hopefully we build more support for elimination of the ‘in-the-home' restriction, more support to get rid of the [competitive] bidding program, etc.," said Cara Bachenheimer, senior vice president of government relations for Invacare Corp. in Elyria, Ohio. "[The] key is to work closely with consumer groups as their voices are most credible with Democrats."

Bren Sullivan, owner of Sullivan Respiratory in Meeker, Colo., and past president of the Colorado Association for Medical Equipment Services, said he is choosing to be optimistic about the new year, the new administration and the new legislators.

"I think Democrats are more health care-friendly," said Sullivan, who added that he hoped among other things the 36-month cap on oxygen rental would be overturned. "The last four years have been pretty tough, and the 36-month cap has got to be turned around or there's going to be a lot of small businesses going under—mine included," he said.

John Cassar, owner of SuperCare in the City of Industry in California, was not so optimistic. He does not believe Obama's plan to bump up corporate taxes and levy an additional tax to help pay for his universal health care plan is going to help already overburdened employers, many of whom, like himself, already pay for their employees' health care.


"I am just praying that universal health care does not come in," Cassar said. "It would obviously force, I believe, a national bidding process."

With universal health care in place, he said, he could foresee a single type of health plan payer and a single type of payment system, chosen most likely by national competitive bidding. That, he said, would not be beneficial to any part of the HME industry.

While some like Cassar are deeply concerned about the possibility of universal health care, believing it goes too far, the 15,000-member Physicians for a National Health Program doesn't believe it goes far enough. The organization urged Obama and the new Congress to "do the right thing and enact a single-payer national health insurance plan."

Obama's stated plan, the group said, is a "hybrid of private health insurance plans and government subsidies," and it will fail to address the problems of "our dangerously dysfunctional system."

Bachenheimer said Obama intends to "broaden coverage for some portion of the 47 million uninsured by providing affordable, comprehensive, portable health coverage for every American via a new public insurance program and the creation of a National Health Insurance Exchange to help Americans and businesses that want to purchase private health insurance directly."


The new president would, she added, "mandate that all employers provide coverage except for start-ups and very small businesses, that all children obtain coverage, and [the plan would] reimburse a portion of premium cost to employers when reimbursement is used to lower premiums for employees."

The president-elect's health care plan is not necessarily a done deal, but the new administration and Congress are expected to begin addressing system reform, the uninsured and Medicare legislation early in 2009.

Sen. Max Baucus, D-Mont., chair of the powerful Senate Finance Committee, said he will outline his own proposals for health care reform this week. While they will likely "dovetail" with Obama's plan, he said, "in the places where our opinions and policy plans diverge, I am eager to work with you to achieve consensus."

As to the president-elect's stance on HME, it's currently unknown, Bachenheimer said. So far, she said, "Obama's campaign has not delved into the level of ‘HME weeds'—there is nothing in his campaign issue papers that speaks directly to Medicare and how it pays for oxygen and HME.

"All we know about Obama's health care proposal is what he has as part of his campaign," she said. "He has announced however, that he plans to unveil more details [this] week."


Bachenheimer noted that Obama's staff supported the delay of competitive bidding once they understood the issues and believes that is a good sign.

"[It's] always a good thing that the staff listens and learns. Open-door communication is obviously key," she said.

She added that she hasn't a clue as to whom Obama will appoint as the HHS secretary or the administrator of CMS, although various media outlets have speculated on former Senate Majority Leader Tom Daschle, D-S.D.; former National Institutes of Health Director Harold Varmus; and Democratic National Committee Chair Howard Dean, a physician, as possible candidates for the top job at HHS, and, among others, Elizabeth Fowler, chief health counsel for Baucus, as a possible new CMS head.

While much remains unknown about the impact of the new players in Washington, one thing is certain, stakeholders said: Providers and other industry insiders must be proactive in getting their message across to those in power.

"We must help the new and expanded Democratic majority understand who we are, what we do and how good we are," said Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers. "As the new administration appoints the leaders of HHS and CMS, we have new opportunities to advance the agenda of DME."

VGM's Gallagher ticked off repeal of the oxygen cap, fraud eradication, "competitive bidding—defeat of" and a positive PR campaign for DME as the industry's four main priorities, and he called for "each and every provider" to schedule meetings with their legislators to discuss the issues. "Sit down with them and say, ‘Here are our concerns,'" he urged.

Sullivan agreed. His state of Colorado now has two Democratic senators, he said, and he plans to "darn sure" be talking with them about the HME industry and the challenges it faces. "I believe that's the only way to get it done—organize at the grass roots," he said, adding that these weeks before the changes take place allow the industry to get organized and present its case.

"With the success of the [Medicare Improvement for Patients and Providers Act that delayed competitive bidding], at least we know if we get organized, we can make progress," he said. "Hopefully, we can just get that success rolling and overturn some of those big defeats that have happened over the last four years."