Impact of Obama, New Congress a Question Mark for HME

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.”