House healthcare reform bill wallops HME

WASHINGTON - An $894 billion healthcare reform bill unveiled Thursday by the House of Representatives contains "significant hits" for HME, say industry stakeholders.

Provisions in the Affordable Health Care for America Act, H.R. 3962, target the HME industry for $5 billion to $10 billion in cuts over the next 10 years, says Walt Gorski, vice president of government affairs for AAHomecare.

"All healthcare sectors are being asked to (absorb cuts)," he said. "However, we believe we are being asked to take a disproportionate hit, especially in light of previous cuts on power wheelchairs, the 9.5% reimbursement cut and oxygen cuts."

One provision that industry stakeholders haven't seen before: The bill would authorize the Government Accountability Office (GAO) to evaluate a competitive bidding program for HME manufacturers.

"This had not been thoroughly vetted by any of the committees during the development of healthcare reform," said Seth Johnson, vice president of government affairs for Pride Mobility. "We'll certainly weigh in with our friends on Capital Hill to let them now we are opposed to it."

The bill calls for the GAO to complete its evaluation within 12 months of a healthcare reform bill passing--probably around the same time CMS is gearing up for Round 2 of national competitive bidding, industry stakeholders pointed out.

"Reading between the lines--maybe the government believes that NCB might go away based on (a bill introduced by Rep. Kendrick Meek that would eliminate the program)," said one stakeholder.

The bill also squeezes oxygen providers a little tighter. Providers serving beneficiaries at month 27 would be required to continue doing so for the remainder of the reasonable useful lifetime of the equipment (60 months), regardless of the patient's location.

"Suppliers are going to have to make a serious business decision nine months earlier as to whether to continue to serve that patient," said Wayne Stanfield, executive director of the National Association of Independent Medical Equipment Suppliers (NAIMES). "Apparently someone has convinced Medicare that patients are being underserved."

In the case of an oxygen provider who files for bankruptcy, and more than 24 months of rental payments on the equipment have been made, the beneficiary may begin a new 36-month rental period with another provider. The bill does not include language to reform the 36-month oxygen cap.

Similar to the Senate Finance Committee's bill, the House bill would tax HME manufacturers on the sales of medical devices, but only at 2.5%. That lowers the savings from $40 billion to $20 billion over 10 years. Unlike the Senate bill, however, it would exempt retail sales; it would not exempt class 1 and II devices.

Other provisions in the House bill:

* DME is specifically included in the reform plan as covered services.

* Productivity adjustments would be made to "certain DME" beginning in 2013. Certain DME is not defined yet, nor how productivity adjustments will be made.

* The first-month purchase option would be eliminated for all power wheelchairs except Group 3 complex rehab products.

* Establish a new transfer of ownership provision for Group 3 support surfaces and reinstate the purchase option for such support surfaces in the 10th month. If rental is chosen, suppliers are required to provide and support the item for the remainder of the useful life (five years) at no charge to Medicare.

* Exempts pharmacies from accreditation if they only provide diabetic supplies, canes and crutches.

The House is expected to begin debate on the plan this week.