Senate reform bill bites HME big-time

WASHINGTON - Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, released a draft healthcare reform proposal Wednesday, and industry stakeholders aren't happy about it.

The biggest surprise: Baucus recommends expanding the number of metropolitan statistical areas from 79 to 100 in Round 2 of national competitive bidding.

"That was the first time we had heard that," said John Gallagher, vice president of government relations for The VGM Group. "The thought was that they'd just do Round 1 and then go from there. Now it looks like they'd like to speed up rounds 2 and 3 together."

The proposal contains several other provisions aimed at the HME industry. These include: an annual excise tax on medical device manufacturers that's estimated to cost them $29.9 billion over 10 years; and the elimination of the first month purchase option for standard power wheelchairs.

"There's support for preserving the purchase option or, at a minimum, including some type of alternative that would preserve the purchase option but also provide some level of savings to the Medicare program," said Seth Johnson, vice president of government affairs for Pride Mobility.

The proposal did not include specific cuts to oxygen, but stakeholders say the threat remains.

"This is a multi-chapter book and we're on chapter 2," said Cara Bachenheimer, senior vice president of government relations for Invacare. "This is not the end of the story, and we still need to be sending our message on oxygen."

The plan should serve as a wake-up call for the HME industry, said AAHomecare's Walt Gorski.

"We need to make folks aware of the impact of this proposal on HME, a very cost effective modality of care," he said. "We've gotten very focused on oxygen but the rapid implementation of NCB that's supposed to save $1.4 billion over 10 years (is a concern). We need to focus energy on addressing the concerns coming out of the Senate Finance Committee.

The Baucus proposal has come under fire from all sides. Democrats don't like it because it doesn't have a public option, and Republicans fear it will increase bureaucracy and won't really save money over time, said Johnson. Still, word is that senators believe they can work with the proposal to craft legislation that could pass in the Senate, he said.

"They all seem open to modifying the bill and seem convinced that what is there today will not be a reflection of the final package," said Johnson.

On the House of Representatives side, the Energy and Commerce Committee has yet to finish its markup of a reform plan, but Gorski expects to see it sometime next week.