Update: On October 13, 2009, the Senate Finance Committee approved their amended Baucus Bill with a 14 – 9 vote (the first step in sending the bill to the Senate floor).

 

As the Senate Finance Committee pushes through their amended healthcare reform bill – a bill known as the Chairman’s Mark: America’s Healthy Future Act of 2009, or Baucus Bill for short – two questions are on everyone’s mind: 1) How much is the bill going to cost? and 2) How would we pay for it?

 

How much is the bill going to cost?

Originally, the bill was estimated to net around $900-billion, which would be paid over a period of 10-years. However, after a September mark-up session in which the Senate Finance Committee voted on over 500 amendments (giving some more consideration than others), the bill’s true cost wasn’t immediately known.

 

To determine the cost, the Committee presented their amended bill (which may be read here) to the Congressional Budget Office (CBO) for a preliminary cost analysis, or score. Perhaps one of the greatest difficulties faced by the CBO when scoring the bill, was that it was almost entirely conceptual – a shell if you will – and had not yet been embodied in legislative language. (Update: The bill has since been released in its legislative form, S.1796 and is 1,502 pages long.)

 

On October 7, 2009, the CBO released its preliminary cost analysis of the amended Baucus Bill. In a nut shell, as currently written the bill is estimated to cost $829-billion, well under the original $900-billion estimate, and should reduce federal deficits by $81-billion from 2010-2019.

 

But how the Committee proposes to pay for the bill isn’t entirely clear. Per the CBO’s analysis:

(Note: Bold highlights have been added and are not part of the original format.)

“Among other things, the Chairman’s mark, as amended, would establish a mandate for most legal residents of the United States to obtain health insurance; set up insurance “exchanges” through which certain individuals and families could receive federal subsidies to substantially reduce the cost of purchasing that coverage; significantly expand eligibility for Medicaid; substantially reduce the growth of Medicare’s payment rates for most services (relative to the growth rates projected under current law); impose an excise tax on insurance plans with relatively high premiums; and make various other changes to the Medicaid and Medicare programs and the federal tax code.

               

“…costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT [Joint Committee on Taxation] and CBO estimate would increase federal revenues by $196 billion over the same period. In subsequent years, the collective effect of those provisions would probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.”

 

How would we pay for it?

Since the bill’s conception, one of the primary suggestions on how to pay for it has been through the savings that could be obtained by reducing fraud, waste and abuse within the Medicare and Medicaid programs.

 

Unfortunately for providers, much of the discussion on how to obtain those savings has left many pointing the finger at the DMEPOS industry, especially the media.

 

(Can’t see this video? Click here!)

 

(Can’t see this video? Click here!)

So what can providers do?

 

First, start by staying up-to-date on the latest legislation affecting the healthcare industry.

 

For instance, did you know that the amended Baucus Bill proposes, among other things, to:

• Eliminate the scheduled 2014 DMEPOS fee increase.
• Limit the purchase option for wheelchairs to only complex rehabilitative power wheelchairs by 2011.
• Reduce the period for timely filing to 12-months.
• Impose a $350 Medicare enrollment application fee.
• Subject new providers to enhanced screenings and a 6-12 month probationary participation period, prior to admittance into the Medicare or Medicaid programs.
• Suspend payments to providers under investigation for fraud or abuse.
• Impose a $4-billion annual fee on medical device manufacturers (allocated by market share) beginning in 2010. Note: Companies with annual sales of $5-million or less are excluded. FDA Class I or II products that retail for under $100 are also excluded.
• Expand the Competitive Bidding program nationwide by 2016 (except for rural areas).
• Extend the RAC program to Medicare Parts C, D and Medicaid by 2010.
• Create an independent Medicare Commission charged with reducing the cost of Medicare spending.

Along with the Baucus Bill, several other pieces of legislation are also circulating their way through Washington. The Senate’s Health, Education, Labor and Pensions (HELP) Committee recently released its own healthcare reform bill, the Affordable Health Choices Act (S.1679), and the House of Representatives is currently pushing through its own America’s Affordable Health Choices Act of 2009 (H.R. 3200).  It’s expected that the recently approved Baucus Bill will eventually be meshed with the HELP Committee’s bill into one “super bill” – if you will – before deliberation takes place on the Senate floor.

 

Once you’re aware of the bills and their impact on DME, it’s time to contact your congressmen. Remember, none of these bills are final, and there’s still time to fight for positive changes for the DMEPOS industry.

 

Reach out to the senators and representatives of your state and let them know your concerns. Tell them how the proposed legislation would impact your business and patients. Make phone calls and write letters, and urge members of congress to sign onto those petitions advocating for the DMEPOS industry.

 

Consider the following talking points:

• The DME industry took a 9.5% reimbursement cut in 2008 as a result of the delay in Competitive Bidding. That cut was never restored and we are now forced to place bids in 2009 below a reimbursement rate that includes the 9.5% cut.
• The costs associated with being a DME provider go well beyond the cost of the equipment itself. Providers deliver and maintain equipment, train beneficiaries on its use and have other overhead costs, including personnel salaries and training.
• The DME industry wants to be part of the solution and is willing to work with congress. Providers are currently complying with new accreditation and surety bond requirements aimed at reducing fraud and abuse, as well as the FTC’s requirement to implement an Identity Theft Prevention Program.

To find the contact information for your senator, click here.

To find the contact information for your representative, click here.

 

For additional information on legislation affecting the DME industry and how you can make your voice heard, visit AAHomecare’s Action Center or The MedGroup’s Capitol Connection pages, and be sure to look for important legislative updates and bill summaries inside each issue of Vista Notes.

By: Michelle Duncan

 

DMEPOS providers and suppliers may soon be required to pass stringent compliance reviews, disclose information about their business in a national database and make details about their relationships with physicians public. That is, if a proposed healthcare reform policy released by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Charles Grassley (R-Iowa) becomes law.

 

Entitled Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs, the policy is “the first of three sets of potential option papers” that will be discussed and debated by Finance Members as they work to create a comprehensive proposal for healthcare reform, according to a Committee on Finance press release, issued April 28, 2009.

 

Note: Throughout this article, page numbers have been included to cite the location of quotes within the proposed healthcare reform policy. A full copy of the 48-page policy may be downloaded here.

 

Public comment on any of the policy’s suggested reform options may be directed to: Health_Reform@finance-dem.senate.gov. The deadline for comments is May 15, 2009.

 

Guilty until Proven Innocent

Among the reform options in senators Baucus and Grassley’s healthcare policy, is a proposal to grant the Secretary of Health and Human Services (HHS) the power to utilize various screening techniques – including criminal background checks and even requiring fingerprint submissions – to evaluate an enrolling Medicare provider’s risk of noncompliance.

 

As part of the evaluation, all prospective providers would be required to disclose to the Secretary any “previous affiliations with enrolled entities that have uncollected Medicare or Medicaid debt,” potential grounds for the Secretary to deny their enrollment applications (p. 42).

 

Furthermore, the proposed reform option grants the Secretary the ability “to require surety bonds of up to $500,000 (commensurate with the size of the business) and to impose moratoria on the enrollment of new providers as determined to be necessary to prevent or combat fraud” (p. 43).

 

Upon passing their evaluations, new providers and suppliers would be required to go through a “provisional participation” period of 6-to-12 months. During this time, some providers may be subject to “enhanced oversight, such as prepayment review[s] and payment limitations” (42.)

 

The two senators propose covering the costs of screenings by charging Medicare enrollment application fees. Monetary penalties would also be imposed on those omitting or providing false information on their applications.

 

One PI: Big Brother is Watching

If you have any skeletons in your DME closet, they may soon be available for all of Big Brother to see.

 

The implementation of a new “One PI” healthcare database is another reform option proposed in senators Max Baucus (D-Mont.) and Charles Grassley’s (R-Iowa) policy.

 

The new database would potentially consolidate multiple healthcare databanks, including the HHS Office of the Inspector General’s (OIG) Healthcare Integrity and Protection Data Bank (HIPDB), into one comprehensive data source, One PI.

 

The current HIPDB contains information on providers such as:

• Civil Judgments
• Federal or State Criminal Convictions
• Actions Taken by Federal or State Licensing Agencies
• Exclusions from Medicare and Medicaid 

According to the proposal, the One PI database would combine the HIPDB with other provider databanks into a national “sanctions data system,” able to be accessed by “state licensure boards and federal and state law enforcement agencies” (p. 44).

 

Along with the above information, One PI would also contain the following about each Medicare provider: 

• Provider Ownership
• Provider Business Relationships
• History of Adverse Actions
• Results of Site Visits and Other Monitoring
• Fraud Settlement Data

One of the ideas behind developing One PI is to give agencies such as the OIG and Department of Justice (DOJ) the ability to investigate potential fraud and abuse via a centralized data source. If voted into law, Medicare applicants would need to be verified in the One PI database, “prior to [receiving] provider/suppler numbers” (p. 44).

 

Physician Relationships Exposed

The creation of a new policy aimed at making physician relationships transparent is also among the reforms proposed in the healthcare policy draft.

 

Under the subheading “Physician Payment Sunshine,” senators Baucus and Grassley propose amending “part A (General Provisions) of title XI of the Social Security Act” to require manufacturers of a covered drug, device, biological, or medical supply, to make public any relationships in which they provide “payments and other transfers of value” to a physician (p. 26).

 

The proposed policy would require those manufacturers to report the following information electronically to the Secretary of HHS on an annual basis beginning March 31, 2012, and on the 90^th day of each year thereafter: 

• The name and address of all physicians paid
• Amount/value of each payment
• Dates of payment
• A description of the form of payment
• The reason for payment (i.e. marketing, education, research)
• The name of any covered drugs, devices, biological or medical supplies related to the reason for payment
• National Provider Identifier
• The name of any entities or individual the payment was transferred to at the physician’s request 

Some payments and transfers would be excluded from the reporting requirement. Those transfers not required to be reported to the Secretary include: 

• Payments or transfers of $10 or less
• Samples intended for patient use
• Patient educational materials
• Short-term loan of a covered device
• Discounts and rebates
• In-kind items used for charity care
• Profit distributions from publicly traded companies 

Under the newly proposed policy, the above listed manufacturers would also be required to provide the Secretary with electronic, annual reports of “any ownership or investment interest (other than in a publicly traded security and mutual fund) held by a physician (or an immediate family member)” (p. 26).

 

Beginning September 30, 2012, electronic reports submitted to the Secretary would be compiled and made available via “an Internet website” (p. 26). In addition to compensation information, the website would include the following: 

• Enforcement actions during the preceding year
• Background information on physician-industry relationships
• A separate listing of payments related to clinical research 

To ensure payments are reported, Baucus and Grassley suggest imposing a civil monetary penalty (CMP) of $1,000 to $10,000 for each unreported payment, with a maximum total annual CMP of $150,000. For those who “knowingly fail to submit information,” an increased CMP of $10,000 to $100,000 per purposely withheld payment would apply. In this case, the maximum total annual CMP would be $1,000,000 (p. 26).