Competitive Bidding Stalls in Senate,
AAHomecare Turns Up Lobbying Heat
Senate arguments over competing Medicare prescription drug plans bought home care industry and disability advocates a little more time to lobby against national competitive bidding, but the threat that it could pass is still great, warns the American Association for Homecare (AAHomecare).

In June, the House passed the Medicare Modernization and Prescription Drug Act of 2002 (HR 4954), which contains a provision for national competitive bidding for certain HME. Senate members who face re-election this year are eager for the Senate to pass a similar bill, since polls show that prescription drug coverage is an issue voters care deeply about. However, none of the competing Senate Medicare bills could get the 60 votes needed to pass before the Senate’s August recess.

The Senate Medicare bills have so far not included competitive bidding. However, Senators Bob Graham (D-Fla) and Senator Tom Harkin (D-Iowa) have both come out as proponents of competitive bidding and will likely push to amend any Senate Medicare bill that passes to include competitive bidding.

In addition, because the Senate version of HR 4954 was among the bills defeated, any Medicare bill the Senate passes will need to be reconciled with the House bill and voted on by both the House and Senate before the President can sign it into law. Senators eager to pass a compromise bill could add HR 4954’s competitive bidding provision to any final version of the bill the two houses will send to the President.

“Despite the fact that nationwide competitive bidding would change the face of our industry forever, it is not even a minor blip on Congress’ radar screen,” says David Williams, director of government relations for Invacare Corp, Elyria, Ohio. “Homeland security, unfinished appropriations bills and the prescription drug issue will dominate the debate in Washington from the moment Members return from the August recess to the day they adjourn for the year (now scheduled for October 3). It is absolutely imperative that the industry and its allies raise so much noise in September that it is impossible to ignore the issue. Otherwise it will remain in the shadows from where it could spring forth as an attachment to another bill and become law without debate.”

To counter the argument that competitive bidding will save the government money, HME industry advocates are using two studies released in July. The first, by PriceWaterHouseCoopers, questions the savings the Congressional Budget Office says competitive bidding would create. (See story below.) The second, by Multinational Business Services Inc, says the Centers for Medicare & Medicaid Services would need to hire 1,626 full-time employees to manage nationwide competitive bidding, which would minimize any savings from the program.

In addition, the Coalition for Access to Medical Services, Equipment, and Technology (CAMSET), which formed in June to stop competitive bidding, continues to add more members. At press time, it was composed of 22 consumer advocacy organizations and trade associations.

Because September will be a critical time for Medicare legislation, AAHomecare has organized a one-day lobbying event on September 18 and encouraged all of its members to fly in and attend. “The September 18 Fly-In presents one last chance to educate your elected representatives and their staffs that Medicare beneficiary access to quality home care could be significantly jeopardized if they support competitive bidding,” says Steven J. Knoll, AAHomecare’s chairman and president of Knoll Patient Supply, Topeka, Kan.

For details, call AAHomecare at (703) 836-6263. To learn more about CAMSET, see its Web site at www.protectaccess.org.

Legislative/Regulatory News

HIPAA Final Rule In
October 16 is right around the corner, so be ready to comply with the Health Insurance Portability and Accountability Act (HIPAA) privacy requirements unless you have filed for a 1-year extension. The deadline for HIPAA Transaction and Code standards set by the Administrative Simplification Compliance Act (ASCA) is October 15. A final rule appearing in the April 14 Federal Register has eased the HIPAA paperwork burdens of covered entities. The decision eliminates the need for consent requirements for information disclosures for treatment, payment, and health care operation. Providers must obtain, however, written authorization before using a patient’s information for most marketing purposes. Another modification provides an extension period for covered entities to amend existing written agreements with business associates to incorporate confidentiality provisions. The final decision strays little from the amendments proposed in March. For more information, visit www.cms.hhs.gov/hipaa.

Report Finds Competitive Bidding Savings Overstated
The Congressional Budget Office (CBO) 10-year estimate of the potential savings of HR 4954’s national competitive bidding program may have been inflated by more than $6 billion, according to a July 22 report produced by the Coalition for Access to Medical Services, Equipment, and Technology (CAMSET).

The report, titled “Misunderstandings and Uncertainties Overstate Likely Savings from Competitive Bidding in the Medicare DME Market,” states that the CBO projections do not reflect uncertain costs that may be incurred by the Centers for Medicare & Medicaid Services (CMS). The report presents an alternative set of assumptions, indicating a reduction of CBO’s $7.7 billion estimate of Medicare cost savings to about $1 billion over the next decade. The report also calls for evaluation of the authority of the Department of Health and Human Services Secretary to impose competitive bidding based on county and DME categories. The complete report is available at CAMSET’s Web site, www.protectaccess.org/reports.htm.

HHS Creates New Office on Disability
The Department of Health and Human Services (HHS) gave President Bush’s New Freedom Initiative a boost on July 31 when it announced the creation of a new Office on Disability to oversee the coordination, development, and implementation of programs and special initiatives within HHS that affect people with disabilities. Intended to centralize the team behind the New Freedom Initiative, the office will open in the fall of 2002. Bush created the program to help tear down barriers facing people with disabilities. Home health care advocates hope it could increase pressure on Medicare to eliminate the homebound requirement for many HME users.

VA Ends New Patient Recruitment
On June 12, the Office of Inspector General (OIG) issued a report in favor of cutting Medicare spending, citing a comparison to the budget of the Department of Veterans Affairs (VA). The OIG argued that Medicare could reduce spending based on what was apparently working for the VA. It seems, however, that the VA is facing its own service issues and budgetary constraints.

According to a July 18 memorandum addressed to the department’s 23 health network directors, the VA will no longer advertise for patients. Anthony J. Principi, secretary, says that the department is still open to veterans who want to enroll, but he argues that since there are already thousands of people waiting months to be seen, recruiting new patients under those circumstances is unfair.