Sen. Baucus To Add Delay Of Medicare Competitive Bidding Program To Legislation That Would Stop Physician Fee Cut

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Primary Care / General Practice
Article Date: 13 Jun 2008 - 11:00 PST

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Senate Finance Committee Chair Max Baucus (D-Mont.) on Wednesday said he is adding language that would delay for 18 months the Medicare competitive bidding program for durable medical equipment to a bill that would halt a 10.6% cut in Medicare physician fees, CongressDaily reports (Edney, CongressDaily, 6/12). Under the competitive bidding program, which is scheduled to begin July 1, CMS will select DME suppliers to participate in Medicare based on bids they submit. The 2003 Medicare law mandated the program as part of a larger effort to implement competitive bidding.

In 2008, the program will operate in 10 of the largest Metropolitan Statistical Areas and will apply to 10 of the top DME, prosthetics, orthotics and supplies product categories. In 2009, the program will expand to an additional 70 MSAs and will continue to expand in future years. The program also will apply to additional product categories in future years. The program likely will result in an average 26% decrease in the prices of medical equipment in the 10 MSAs, according to CMS (Kaiser Daily Health Policy Report, 6/10).

Lawmakers have been critical of the bidding program in part because more than half of the suppliers that submitted bids were disqualified because of missing paperwork (CongressDaily, 6/12). According to Dow Jones, "Industry representatives complain that while some longtime suppliers were improperly disqualified, some winners made reckless bids" (Wisenberg Brin, Dow Jones, 6/11). Lawmakers plan to "make revisions to ensure the process is more accommodating" if the bidding program delay is approved, CongressDaily reports.

Baucus in a statement said, "I am most concerned about the impact that a poorly designed program will have on Medicare beneficiaries, many of whom are confused about what this new program means for them and are concerned that they won't be able to get care from someone in their own community."

The Congressional Budget Office estimates that with the DME program delay, Baucus' Medicare package would cost about $19.8 billion over five years. The bidding program delay would be paid for by reducing payments to DME suppliers, which the American Association of Homecare, the trade group for DME suppliers, said it was willing to accept for revisions to the program.

The CBO report is available online (.pdf).

Prospects
CongressDaily reports that Baucus' addition of the bidding program delay is "expected to entice some Republicans to his camp as the Senate readies to vote on limiting debate" on the legislation on Thursday (CongressDaily, 6/12). However, it is still "unclear if Baucus has 60 votes needed to begin debate on the legislation," according to CQ HealthBeat (Carey, CQ HealthBeat, 6/11). Senate Minority Whip Jon Kyl (R-Ariz.) said that Baucus' bill is unlikely to get cloture (Taylor, Roll Call, 6/11). Senate Majority Leader Harry Reid (D-Nev.) will force a vote on Baucus' bill on Thursday, according to CQ Today (CQ Today, 6/11).

Competing Bill
Finance Committee ranking member Chuck Grassley (R-Iowa) on Wednesday introduced a competing bill (S 3118) that would delay the physician payment cut. He said his measure would not rely on offsets that the Bush administration is opposed to, namely cuts to MA plans. The measure would cut indirect medical education payments under MA, just as Baucus' bill would (Edney, CongressDaily, 6/11). However, it receives the rest of its funding from cuts to Medicaid, according to CQ Today. A Grassley aide said that the senator's measure also would include language to delay the DME bidding program (Wayne, CQ Today, 6/11). The cost of Grassley's bill has yet to be determined. Both bills also would place restrictions on MA plan marketing practices (CongressDaily, 6/11).

House Action
Meanwhile, House Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.) and ranking member Dave Camp (R-Mich.) on Wednesday were preparing to introduce a standalone bill that would delay the bidding program for 18 months, CQ HealthBeat reports. The measure would be funded by reducing DME reimbursements by 9.5% in 2009. In 2014, DME suppliers would receive a 2% increase under the measure (CQ HealthBeat, 6/11).

AA Homecare Lawsuit
AA Homecare on Wednesday said that it filed a lawsuit on Monday against HHS Secretary Mike Leavitt and acting CMS Administrator Kerry Weems that seeks a preliminary injunction against the first phase of the bidding program and later a permanent injunction against the whole program, The Hill reports. The lawsuit alleges that CMS did not include adequate information about financial standards suppliers needed to meet to be accepted by the bidding program, and as a result, many were disqualified. AA Homecare President and CEO Tyler Wilson in a statement said, "While we will continue a full-court press on the legislative front to delay the bidding program, we also want to get the courts involved," adding, "The bidding program will put thousands of homecare providers out of business, and patients' access to quality home medical equipment and services will suffer as a result" (Young, The Hill, 6/11).

Florida Health News Examines Bidding Program
Florida Health News on Tuesday examined the DME bidding program. Although CMS says the program will provide savings for the affected areas, some beneficiaries are confused about what to do if their supplier is not a winning bidder, according to Florida Health News. In addition, suppliers who did not win bids "say the new system will jeopardize their business as well as their customers," Florida Health News reports (Jaffe, Florida Health News, 6/10).

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