Thursday, February 28, 2008

What’s in a Name?

Senator Pat Roberts (R-Kans.) has lent his name to some of the most important homecare bills in the past few years including the Hatch Conrad Bill (S. 1428) and the Cardiac Pulmonary Rehab Bill (S.329). As a new member of the Senate Finance Committee in the 110th Congress, Roberts has the opportunity to give increased leadership on legislation in health care and Medicare issues.

Senator Ken Salazar (D-Colo.) is also a member of the Senate Finance Committee and has been a champion of homecare. He is committed to working with the industry to come up with a viable solution for payment reform and also signed his name to the HOPP Act. He has tackled the challenge of providing affordable health care by fighting to broaden the Children’s Health Insurance Program and by working to improve health care for older Americans.

Representative Altmire (D-Pa.) serves as Chairman of the Investigations and Oversight Subcommittee of the House Small Business Committee, which recently held a hearing to discuss the impact of competitive bidding on small providers. He has actively participated in homecare discussions during his first term in the United States House of Representatives.

Another important name for the homecare community is Laurence D. Wilson, Director of the Chronic Care Policy Group at the Center for Medicare Management, Centers for Medicare and Medicaid Services (CMS). Mr. Wilson will be speaking during the competitive bidding forum at this year’s legislative conference.

The Director of the office of Management and Budget, Jim Nussle will be providing his perspective on the outlook for the Medicare and Medicaid programs.

Each of these “great names” in homecare will be speaking at the AAHomecare 2008 Washington Legislative Conference along with other industry champions and knowledgeable advocates.

For full details and a tentative agenda please visit

Friday, February 22, 2008

Suspend Round One, Cries the Homecare Industry

“As our economy teeters on the brink of a recession and the federal government looks for long term solutions to rapidly increasing health care costs, we believe that this program will only exacerbate these problems and harm Medicare beneficiaries who are prescribed home medical equipment,” said AAHomecare in a letter to Secretary Leavitt on Friday afternoon asking for suspension of round one of the competitive bidding program.

The letter requested CMS suspend implementation until issues raised in a report by Robert Morris University could be examined and analyzed by health care experts and industry experts on the Medicare Program Advisory and Oversight Committee. The new economic study finds that the competitive bidding program for durable medical equipment (DME) being rolled out by the Centers for Medicare and Medicaid Services (CMS) would lead to reduced competition, lower quality of care, and higher costs. This study calls into question the fundamental underpinnings of the program and AAHomecare believes the agency should be required to evaluate the principles and conclusions of this report and again consider whether competitive bidding is in the long-term interests of Medicare, its beneficiaries and taxpayers.

Pennsylvania Association for Medical Suppliers hosted a press conference on Monday at the United Cerebral Palsy of Pittsburgh, and the study has generated significant press coverage in the Pennsylvania media. View the Pittsburgh Post-Gazettes coverage here:

Thursday, February 14, 2008

USA Today Analysis Finds Homecare Reduces the Cost of Government Spending on Seniors. Duh!

A front page story in the February 14, 2008 USA Today says government spending for seniors “soared to a record $27,289 per senior in 2007.”

The newspaper’s analysis of government figures drew four key conclusions, and one of them is that long-term care costs per senior have actually declined over the past three years “because of a move away from nursing homes to less-expensive home care.”

Of course, numerous studies have drawn the conclusion that durable medical equipment and other types of homecare equipment and services deliver very cost-effective care and keep seniors out of the emergency rooms, hospitals, and other more expensive settings, which is why HHS Secretary Leavitt has called home-based care “radically” more efficient than institutional care.

Findings of the USA Today analysis include these points:

• Medicare experienced the most explosive growth from 2000 to 2007. The Medicare prescription drug benefit, started in 2006, accounts for about one-fourth of the increase in Medicare, which provides health benefits for people 65 and older.
• Long-term care costs per senior have declined slightly in the last three years because of a move away from nursing homes to less-expensive home care.
• The cost of senior benefits is equal to $10,673 for every non-senior household.
• About 35% of the federal budget is spent on senior benefits, up from 32% in 2004.

See the full story at:

Tuesday, February 12, 2008

Why increase the surety bond by 1000 percent before implementing the original amount?

A law passed in 1997 requires a $50,000 surety bond for DME providers as a deterrent to fraud and abuse. However, the federal government has never actually implemented the surety bond requirement for the DME sector. Next, the Centers for Medicare and Medicaid Services proposed that the amount increase to $65,000.

And now a Senate bill introduced last week would impose a $500,000 surety bond requirement on providers of durable medical equipment (DME) under Medicare. Why increase the surety bond by 1000 percent before the original $50,000 bond has even been implemented?

Insurance experts say a $500,000 surety bond would require that DME providers put up collateral to back the half-million-dollar bond, on top of the $10,000 to $20,000 cost of the bond. A bond of this amount would put thousands of small homecare companies out of business.

These bonds are all being proposed in the name of fighting fraud and abuse, however, it is essential for public and Congress to understand that the Medicare program has failed to effectively exercise its already ample authority to combat fraud and abuse. And while increased civil and criminal penalties may help thwart fraud and abuse in Medicare, most of the people who willingly engage in such activity will not be deterred by higher penalties.

How would a $500,000 bond affect your DME company?

See AAHomecare’s response to this new bill.

Friday, February 8, 2008

Senator Roberts Compares DME Providers Situation to “A Perfect Storm”

Longtime proponent of homecare, Senator Pat Roberts (R-Kan.), grilled U.S. Health and Human Services Secretary Mike Leavitt about suggested cuts to durable medical equipment and services (DME) during a Senate Finance Committee hearing on the President’s fiscal year 2009 budget proposal early this week.

Not only was Roberts concerned for seniors’ welfare, but he also cited his concern for DME providers in the Kansas City MSA who are waiting to hear from CMS about competitive bidding contracts, alluding to his fear that many may no longer be able to provide DME.

Roberts described the current situation for DME providers as “a perfect storm,” saying, “What worries me is that you won’t have enough healthcare providers to even have Medicare.” (The competitive bidding program does not allow for those who are not selected as winning bidders to provide equipment or services to Medicare beneficiaries, even if they agree to the lower, competitively bid reimbursement rates. Medicare payments typically comprise 35 to 50 percent of a small provider’s revenue.)

In defense of the program, Secretary Leavitt said competitive bidding will save more than 20 percent across all the product categories in round one of bidding and described the bidding program as the “fair way” to reduce DME prices in Medicare.

Roberts said he wants to go on record opposing reductions to oxygen reimbursement and other cuts to home healthcare until Congress has a chance to review the coming impact of existing Medicare regulations, referencing the 36-month cap on home oxygen equipment payments and the competitive bidding program.

To read more about providers’ fears about competitive bidding visit: “Equipment dealers brace for Medicare bidding edict” in the Columbus Business First

Tuesday, February 5, 2008

Budget Proposal Reduces Access to Power Mobility for Disabled Americans and Cuts Home Oxygen in Medicare, Impairing Access to Life-Sustaining Therapy

Cuts to home oxygen resurfaced again in the President’s budget, forcing Medicare patients to assume responsibility for owning and managing medical oxygen equipment in their homes after 13 months of rental. Oxygen is a prescription drug regulated by the FDA that requires strict adherence to clinical standards and appropriate monitoring to ensure patient compliance with treatment. Congress has reduced Medicare reimbursement for oxygen therapy by nearly 50 percent over the past 10 years. And deep additional cuts, apart from the President’s proposal, are scheduled to take effect within the coming year.

Another provision included in Bush’s 2009 budget would make providers become lending institutions for the federal government. The provision would eliminate Medicare beneficiaries’ option to purchase a power wheelchair in the first month and thereby establish a forced 13-month rental period. This change would reduce beneficiary access and increase costs to Medicare, requiring durable medical equipment companies to provide financing for a patient’s wheelchair.

According to the Bush administration, the proposed budget would produce $178 billion in spending reductions over five years from 2009 to 2013. All of these Medicare reductions would require legislative action.

“For now, both Congress and the White House seem to be leaning toward smaller health care companies, like home care providers and oxygen-equipment makers,” says the Associated Press.
Many groups, including the American Association for Homecare, have expressed opposition to provisions in the budget which will weaken seniors’ access to durable medical equipment and therapies required in the home. For more on this story or AAHomecare’s response to the President’s proposed 2009 budget view the following links:

AAHomecare’s press release

Congress Likely to Reject Hospital Cuts, CNN Money