Obama Budget Lands DME Sucker Punch
From: Home Care Magazine
WASHINGTON — With a proposal that would limit federal Medicaid payments to Medicare’s competitive bidding rates, President Obama’s 2012 budget left home care advocates reeling after its Monday morning release. A second proposal would require prepayment review for all power wheelchairs.
Overall, the administration budget would wrench a reported $62 billion from government health programs to offset a Medicare “doc fix,” delaying a scheduled 25 percent physician pay cut until the end of 2013.
Responding in an afternoon message to its members, the American Association for Homecare said the budget tightens the squeeze on an “already strapped” industry and “puts home medical equipment at risk.”
As described in the budget:
“The Medicare program is in the process of implementing innovative ways to increase efficiency for payment of durable medical equipment (DME) through the durable medical equipment, prosthetic, orthotic items or services (DMEPOS) competitive bidding program, which is expected to save more than $17 billion in Medicare expenditures over ten years.
“This proposal extends some of these efficiencies to Medicaid, by limiting federal reimbursement for a state’s aggregate Medicaid spending on certain DME services to what Medicare would have paid in the same state for the same services.”
HME stakeholders have said the bid program’s Round 1 reimbursements — at an average 32 percent cut across nine cities — are too low to maintain access, quality of equipment and service. In September, 166 top economists warned CMS that its bid design would fail based on lowball bids resulting in rates that, over the three-year contact term, would be unsustainable.
But agency officials have so far dismissed those concerns. Bidding in Round 2 of the program, which will add 91 cities, is planned for this year with implementation in 2013.
Tying Medicaid to competitive bidding rates would save the government an additional $6.4 billion over the 10 years between 2012 and 2021, according to the budget.
AAHomecare President Tyler Wilson said the proposal “would be a disaster for the already strapped HME sector. It would merely accelerate the race to the bottom in terms of reduced access to medically required home equipment and services and drive even more qualified home medical equipment providers out of business.”
Industry estimates tally potential job losses in the HME sector related to competitive bidding at 100,000.
“As it gets harder and harder to obtain quality equipment and care at home,” Wilson continued, “this ill-conceived idea will merely drive up costs in other parts of our health care system such as hospitals, emergency rooms, and long-term care facilities.”
Power wheelchairs take another hit
AAHomecare also condemned a proposal in the president’s budget that would require prepayment review for all power wheelchairs.
The administration said the requirement would ensure that claims “meet the existing criteria for coverage.” (A December 2009 report from HHS’ Office of Inspector General found three-fifths of PWC claims failed to meet Medicare documentation requirements during the first half of 2007.)
The association, however, said this budget proposal “heaps additional burdens on power wheelchair providers who are already reeling from severe reimbursement cuts, the loss of the first-month purchase option, and numerous, onerous regulations that second-guess physicians’ orders for power wheelchairs for seniors and people with disabilities.”
While it is only the beginning salvo in what promises to be a lengthy battle over the nation’s spending, AAHomecare said “the president’s budget proposes steep cuts in Medicare, which puts home medical equipment at risk.”
What’s more, the association pointed out, Republicans are working on their own budget, which “is likely to include even steeper cuts to federal spending.”
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