Senate Finance Committee proposes cuts for home medical equipment

Sep 17 2009

This morning, Senate Finance Committee Chairman Max Baucus (D-Mont.) issued his recommendations for healthcare reform in his long-awaited "Chairman's mark" version of the bill. The 220-page bill contains several provisions that affect home medical equipment, ranging from power wheelchairs to anti-fraud measures. The bill does not include specific cuts to oxygen payment rates, but the American Association for Homecare believes that the threat of cuts remains.

"While we favor the goals of health care reform and aggressive measures to reduce fraud and waste in Medicare, the cuts proposed for home medical equipment and related services are unwarranted and disproportionate," said Tyler J. Wilson, President of the Association. "We don't believe the cuts will produce either savings or better care for seniors in the long run."

The draft bill includes billions of dollars in cuts to Medicare, including reductions to the home medical equipment sector that will reduce access to care for seniors. These cuts come on the heels of several years of Medicare reimbursement reductions for homecare, and they will hurt small businesses. The home medical equipment and service sector is one of the smallest and slowest-growing sectors in Medicare according to National Health Expenditures data from the federal government.

Among the cuts and negative impacts detailed in the draft Senate legislation:

Competitive Acquisition Program Expansion. The Chairman's mark would expand the number of areas to be included in Round Two of the bidding program for durable medical equipment from 79 of the largest metropolitan statistical areas to 100.

First-Month Purchase Option for Power Wheelchairs. The mark would maintain the first-month purchase option for complex power wheelchairs but eliminate the option for standard power wheelchairs. Nearly all beneficiaries elect the purchase option because they suffer from long-term, debilitating conditions that require customized equipment to meet their specific needs. Removing a beneficiary's right to choose the first-month purchase will create access-to-care problems as the provider will not be able to secure the financing to cover the costs of the power wheelchair over a 13-month period, especially given the current financial environment.

Excise Tax on Manufacturers and Importers of Medical Devices. The Chairman's mark would require an annual tax on manufacturers and importers of medical devices that are categorized as Class II or Class III devices offered for sale in the United States, costing device manufacturers approximately $29.9 billion over ten years.