Why wait and see?

Thursday, August 25, 2011

Just before we went to press with the September issue, lawmakers passed a debt deal that allowed the government to keep paying its bills under one condition: That $1.5 trillion be shaved from the budget deficit by Thanksgiving. (Now there's a reason to give thanks!)

So who's going to be doing the cutting? A 12-member so-called "super committee." And what happens if they fail? Here's where it gets interesting.

If the committee fails, or if it comes up with $1.5 trillion in savings but it fails to get support from its colleagues or the president, spending will be cut by $1.2 trillion automatically. When? Probably January 2013.

That $1.2 trillion includes a 2% across-the-board cut to all Medicare providers. Yup, that means you.

Here's what I want to know: Which is the lesser of two evils: Taking a 2% cut across the chin or waiting to see what a committee comes up with?

I asked my Twitter followers for their opinion (Hey, it's the digital age; I'm @hmeliz!). I got this response back from one HME provider: "I still want my 9.5% back from the competitive bidding delay that went nowhere..." I guess I'll put him in the camp of people who want to wait and see what a committee comes up with.

Which I guess is the case for most people.

I'm told the debt deal was set up this way on purpose. An across-the-board cut is so undesirable that it's a sure-fire way to motivate all those involved to come up with and approve a package of cuts. (God forbid physicians or some other group of Medicare providers with deep lobbying pockets gets saddled with a 2% cut, or any cut for that matter.)

This is too bad.

The committee may be "super," but it has only a few months to do what it needs to do, so it's highly unlikely it's going to do much. That means ideas that have already made the rounds and that would receive little resistance--like applying Medicare competitive bid rates for HME to Medicaid rates in states where the program is in place and applying prepayment reviews to all power wheelchairs--will be taken off the shelves, put back on the table and written down in red ink.

If I were an HME provider and I had a choice, I'd go with a 2% across-the-board cut. This way, I'd know what I'm dealing with and I'd share the pain with other Medicare providers. This last part is huge, considering the way Congress has targeted HME for cuts in the past few years.

At least one industry stakeholder I talked to agreed with me, but could never admit it in public.

"We've already suffered a 9.5% cut," the stakeholder said. "We'd laugh at a 2% cut."

Laughter. That's a good way to react to this whole process.