Federal Budget Fight Throws Another Wrench into HME Works

WASHINGTON—A radical Republican plan that would slice $6 trillion off federal spending over the next decade got a thumbs up on Friday—but only by House Republicans. Every Democrat voted “no.”

By a vote of 235-193, the Republican-run House managed to push the $3.5 trillion, 2012 blueprint for government spending from Rep. Paul Ryan, R-Wis., onto the Senate floor, though by some accounts there it is DOA.

The Democrat-run Senate is expected instead to go along with President Obama’s 2012 budget and companion cost-cutting measures, which, announced last week, would generate $340 billion in savings by 2021 and at least $1 trillion in the following decade, in addition to savings under the Patient Protection and Affordable Care Act.

The question for those in the HME sector is, will either plan harm the industry’s already challenging chances of getting H.R. 1041 passed?

The bill would repeal the industry’s nemesis competitive bidding program and pay for it with $20 billion in appropriated but untapped federal discretionary funds. As of Friday afternoon, the bill had 80 cosponsors.

However, both new budget-cutting measures include curtailing discretionary spending. That, coupled with the “everything is on the table for cuts” mentality in Washington, makes repeal of the bidding program a tough goal according to Washington lobbyist Dean Rosen of Mehlman Vogel Castagnetti, which works with the American Association for Homecare. The country’s financial doldrums are coloring virtually every issue on Capitol Hill, Rosen said.

One reason, he told Medtrade Spring attendees at AAHomecare’s Washington Update Wednesday, is that by 2025, all the government’s money would go to its entitlement programs—Social Security, Medicare and Medicaid—and to service the national debt. Lawmakers are all too aware the situation needs to be fixed, he said.

Also, Ryan’s plan throws into question the very structure of the HME sector since it appears to remove the government from paying for HME, as well as hospitalizations or other health care services, instead transferring that responsibility to insurance companies.

Under the plan, the president’s health reform law would be repealed, and for those now 54 and younger, Medicare would become a voucher system under which participants would select a private insurance plan. The government would shell out about $15,000 to each Medicare beneficiary to pay the premium cost. Ryan’s plan for Medicaid is to give the states block grants and let them administer the program.

“Medicare is projected to go bankrupt in just nine years unless we act to curb the relentlessly rising cost of health care,” Ryan wrote April 14 in an op-ed piece in The Washington Post. “This cannot be done with across-the-board cuts in Washington. It has to be done by giving seniors the tools to fight back against skyrocketing costs. That’s why our budget saves Medicare by using competition to weed out inefficient providers, improve the quality of health care for seniors and drive costs down.”

President Obama’s map for deficit reduction charts a decidedly different course.

With an aim of reducing the nation’s staggering deficit—$1.6 trillion projected this year—Obama would initiate Medicare and Medicaid reforms that would not, he said, shift costs onto seniors and those with disabilities.

“We will reduce wasteful subsidies and erroneous payments,” he said in announcing the cost-cutting measures during a speech at George Washington University April 13. “We will change the way we pay for health care: not by the procedure or the number of days spent in a hospital, but with new incentives for doctors and hospitals to prevent injuries and improve results.”

The president said the growth of Medicare costs could be slowed by strengthening an independent commission of doctors, nurses, medical experts and consumers to recommend the “best ways to reduce unnecessary spending.”

As Republicans and Democrats duke it out over the budget and fixes for the embattled Medicare and Medicaid systems in the coming weeks, AAHomecare President Tyler Wilson told the audience at the Update session that providers have got to keep up the noise on H.R. 1041.

“We know home care can play a role [in reducing health care costs] but you can’t decimate the industry with competitive bidding and you can’t decimate the industry with audits and a whole bunch of other regulatory burdens and expect the industry to serve the needs of the Medicare population going forward,” Wilson said.

“We all have to become advocates,” he said, and providers need to get involved now. “Don’t wait for tomorrow because, in all candor, there is no tomorrow.”

Added Rosen, “The industry has a lot at stake. We’re going to have to be part of the solution.”