Bloomberg and Detroit News Cover Bidding Problems

The Detroit News published an AAHomecare rebuttal to the January 1 George Will column on healthcare issues. The Will column made several misleading comments about the competitive bidding program which are outlined in an early post this month. The AAHomecare rebuttal is titled: “‘Competitive Bidding’ Plan Raises Health Costs.” See http://detnews.com/apps/pbcs.dll/article?AID=/20090126/OPINION01/901260324. Also, Bloomberg News published an article that described AAHomecare’s concerns about the new bidding rules issued in the final hours of the Bush administration. See Seattle Post-Intelligencer article: http://seattlepi.nwsource.com/opinion/397652_bushonline28.html.

The Hill Reporter Jeffrey Young Uses COPD Patients as a Punch Line in an Error-Filled Blog against HME Sector

The Hill reporter Jeffrey Young posted an extraordinarily misleading account of the disastrous Medicare competitive bidding program on the Atlantic Monthly blog (see “Pay Up or Grandma Gets It” at http://business.theatlantic.com/author/jeffrey_young/). Young very accurately parrots the arguments set forth by the Bush Administration for a rush-to-the-bottom approach to home medical care in Medicare, which the bidding program would trigger. Congress wisely reformed and postponed the competitive bidding program.

The bidding program was designed to get the majority of home medical equipment providers (mostly small practices) out of Medicare regardless of what reimbursement rates they agree to. In other words, the program is designed to drastically reduce the number of competitors – who currently compete on the basis of quality, since Medicare sets prices (which have been cut or frozen repeatedly over the past 10 years).

Medicare beneficiaries already trying to cope with cancer, stroke, Lou Gehrig’s disease, COPD, and other serious conditions, will face more challenges under this flawed competitive bidding program: a large decrease in their choice of providers, longer waiting periods to receive equipment or services, and in many cases, a forced change to a provider who may have no prior experience in a given therapy such as enteral nutrition (tube feeding) or oxygen therapy.

Young writes, “Of course, in grand lobbying fashion, [the HME sector] also griped about the bidding process … said the prices would end up so low they would go out of business, and issued dire warnings about grandmas choking for breath while their oxygen tanks went unfilled.” What’s breath-taking is to see Young use COPD patients as a punch line. The more than one million Medicare beneficiaries who depend on medical oxygen therapy in order to breathe surely don't think the quality of their oxygen service and equipment is a joke.

Young fails to mention that durable medical equipment is growing at an incredibly slow rate -- 0.75 percent per year, according to the National Health Expenditure data just published by CMS (2007 data). This compares to more than 6 percent growth for Medicare overall. Nor does Young mention that providing medical oxygen therapy including the required services to beneficiaries in their homes costs less than $7 dollars per day, which includes 24-7 on call service.

Nowhere does Young mention the many consumer and patient organizations, such as Muscular Dystrophy Association and Paralyzed Veterans of America, that adamantly opposed the bidding program.

The deep reimbursement cut that took affect on January 1 is was much more significant than what Young describes as “a tribute of sorts.” That nationwide cut is equal to or greater than the amount of money the bidding program was projected to save. Moreover, the bidding program did not die “on the vine” by a long shot. In fact, the Bush Administration issued a rule to implement the bidding this year in a regulation that was published literally in the last hours of Bush’s term.

Medicare reform will indeed fail if it is pursued with the same incompetence that the Bush Administration applied to the home medical equipment and service sector.

HME Providers from More than 25 States Are Coming to Washington on February 11

So far, more than 100 homecare providers from 25 states have registered to attend the AAHomecare February 11Washington, D.C. fly-in. The event will include information sessions on the substance and politics of addressing the 36-month oxygen cap,the post-cap payment issues, and efforts to modify the Medicare home oxygen benefit to shore up the long-term reimbursement; recovery of the 9.5 percent cut to rehab; preservation of the first-month purchase option for power mobility; competitive bidding; and the HME sector’s leadership in proposing concrete steps to prevent fraud and abuse.

Registrants have been asked to schedule their meetings on Capitol Hill, coordinating in some cases with their state association. Once meetings are scheduled, please post them in the comments section of this blog.

Halt of Bidding Program Was “Ridiculous,” Rivlin Tells Senate Budget Committee

Federal budget experts advised the Senate Budget Committee to curb entitlement spending growth, according to Congressional Quarterly. Alice Rivlin, former head of the Congressional Budget Office (CBO) and the White House Office of Management and Budget, encouraged Congress to immediately take steps to reduce the contributions to future deficits of Social Security and Medicare.

At a Budget Committee hearing yesterday, Senator Sheldon Whitehouse (D-R.I.) warned that if Congress waits too long to reform healthcare via preventive care and information technology then lawmakers would have to revert to the “bloody tool box” of reducing coverage, benefits, and reimbursements. Rivlin advocated using some of those “tools,” such as competitive bidding for home medical equipment. Referring to last year’s delay of the bidding program, “Rivlin said that with all due respect it was ‘ridiculous’ of lawmakers to halt competitive bidding,” reported Congressional Quarterly.

Tyler Wilson, president of the American Association for Homecare, commented, “With all due respect to Ms. Rivlin, it would have been ridiculous to continue that bidding program, which was a disaster for patients and providers alike, which is why Congress wisely reformed and delayed the program. Moreover, the home medical equipment sector more than paid for the full savings that the flawed bidding program was projected to have saved through the 9.5 percent cut that took effect earlier this month. And the durable medical equipment sector is growing at just 0.75 percent per year despite growing demand. ”

President Obama has spoken about the need for holding a “fiscal responsibility summit,” to address issues such as Medicare spending, prior to releasing his first budget to Congress. “As Congress and the administration look at healthcare reforms, it is imperative that the HME sector be present and vocal in these discussions,” Wilson said.

Homecare Community Primed to Meet the 111th Congress on February 11

This nation is on the brink of national healthcare reform, a discussion which homecare providers cannot afford to be absent. To facilitate these discussions, AAHomecare is hosting a one day fly-in program in Washington on Wednesday, February 11. The one day fly-in program will begin at 8:00 a.m. at the Hyatt Regency Crystal City, Arlington, Va.—a short shuttle ride from Reagan National Airport. The program will include issue briefings and discussion until 9:15 a.m. and then House and Senate meetings beginning at 10 a.m.

Participants are asked to schedule their meetings with congressional offices, with guidance from AAHomecare. For some states, the meetings will be scheduled by the state homecare associations. If you are interested in participating, please register online today by visiting the AAHomecare Calendar of Events at www.aahomecare.org. If you are coordinating the Capitol Hill appointments for your state, please post your requests and confirmed meetings in the comments section of this blog.

For more details on the issues facing the HME sector, please visit AAHomecare's website, www.aahomecare.org.

NY Times' Blogger Captures Essence of Homecare

New York Times' blogger Jane Gross captures the importance of homecare in the continuum of care for health through her recent post titled “Why House Calls Save Money.” In this story she speaks with Dr. Resnick, a physician in New York. Dr. Resnick states, “Much of health care that is now delivered in institutions —hospitals and nursing home — should be provided at home.”

As outlined in the blog, various medical journals have published articles showing that keeping geriatric patients out of the hospital reduces costs between 30 and 60 percent and good home-based care dramatically reduces the amount of time people spend in hospitals.

To read the full posting, visit: http://newoldage.blogs.nytimes.com/2009/01/12/why-house-calls-save-money/?hp.

AP Article Highlights Key Issues for Home Patients Whose Devices Depend on Electricity

A national Associated Press article today discussed the emergency needs of homecare patients, and especially oxygen users, who depend on electricity. Roughly 2 million people use home oxygen machines, most of which require electricity. A power outage could be deadly to these homecare patients.

The article states, “When it comes to oxygen, many home health care companies "bend over backward" to race tanks to customers during power outages, noted Washington's Rubinson."

A reference to AAHomecare's request for oxygen providers to be designated as first responders during natural disasters is also mentioned within the article.

For the full text see: http://www.google.com/hostednews/ap/article/ALeqM5grvhaVD9z8kT-Fr13MFzz608pESQD95LFUDO0.

Surety Bond Applies One-Size-Fits-All Approach to Providers

The Centers for Medicare and Medicaid Services (CMS) issued its final rule Monday, December 30, implementing a requirement that mandates home medical equipment providers to furnish CMS with a $50,000 surety bond in order to participate in the Medicare program. This rule implements provisions included in the Balanced Budget Act of 1997.

In its analysis of the rule, CMS states that HME provider costs for securing a bond will be approximately $1,500 per year. The Agency also estimates that as many as 25,188 DMEPOS providers will exit Medicare due to the combined costs of the surety bond and accreditation requirements.

"We are concerned that overly burdensome requirements applying a one-size-fits-all approach will harm legitimate homecare providers," American Association for Homecare President Tyler J. Wilson, told the Associated Press in an article about the surety bond changes that was printed in Forbes and other newspapers across the nation.

The Association has been on record as supporting effective methods to eliminate fraud in the DMEPOS arena and has developed a 13-point plan targeting Medicare waste, fraud and abuse. The Association’s proposal targets efforts at the most vulnerable aspects of the program such as requiring mandatory site inspections for all new home medical equipment providers, requiring a six-month trial period for new homecare providers, and establishing real-time auditing to identify aberrant Medicare billing as it is occurring. The Association’s proposal can be viewed at www.aahomecare.org.

To view the Associated Press article visit: http://www.forbes.com/feeds/ap/2008/12/31/ap5871847.html.

George Will's Column on Medicare Bidding Program Leaves out the Facts

On January first, George Will, an op-ed columnist for the Washington Post, published a column about Michael Leavitt’s (secretary of Health and Human Services) predictions on the rising cost of health care. In Will’s column he says, “Medicare is a price-fixing system for upward of 12,000 procedures and drug codes -- and for hundreds of categories of equipment, the providers of which tenaciously oppose competition. Leavitt began implementing a tiny program of competitive bidding covering just 10 products in 10 cities. Based on the 15 days it lasted before Congress repealed it, savings were projected to be substantial. That is why equipment providers got it repealed."

The American Association for Homecare believes otherwise. The bidding program was not, in fact, repealed by Congress. The word repeal is used twice by Will. It was only slightly reformed and delayed by the Medicare Improvements to Patients and Providers Act of 2008 in order to fix problems because the implementation of the program was a train wreck, as Democrats and Republicans in Congress can attest.

The substantial savings the program were to have reaped will in fact be reaped, dollar for dollar, via a nationwide reimbursement cut to home medical equipment of 9.5 percent that kicks in today, January 1. In other words, the home medical sector is saving Medicare every dollar projected to be saved in order to make the bidding program fair and transparent.

Describing the program as "tiny" is wrong. The 10 home medical categories covered in the bidding program represent the lion's share of the spending in this sector. The initial 10 metro areas would be followed quickly by another 70 areas.

The truth is home medical equipment providers compete on the basis of service since Medicare sets prices. Home medical providers offer what Leavitt himself has called a "radically more efficient" and cost-effective form of healthcare than institutional care for Medicare beneficiaries.
Home medical equipment and therapies require many ongoing services that are not recognized by Medicare. Reimbursing oxygen therapy, for instance, as if it were merely a piece of equipment is not only inaccurate, it may well lead to dangerous lapses in attention and services that COPD patients require.

Here's the real story: Home medical equipment represents less than 2 percent of Medicare spending and it's the slowest-growing sector. But it's a big part of the answer to our healthcare financing challenges. It's not the problem -- not by a long shot.

To read George Will’s piece in the Washington Post visit: http://www.washingtonpost.com/wp-dyn/content/article/2008/12/31/AR2008123102778.html. The association also encourages you to comment online.