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Thursday, June 12, 2008

Competitive bid delay bill introduced

By Larry Lipman | Thursday, June 12, 2008, 05:23 PM

Amid growing indications that Congress may block Medicare’s plan to limit medical equipment suppliers to the winners of a controversial competitive bid process, two key lawmakers today introduced a bill to delay the program by 18 months.

Instead of allowing the program to start July 1 in 10 metropolitan areas including South Florida, the bill would cut Medicare payments for the equipment by 9.5 percent nationwide next year. Payments would increase 2 percent in 2014.

The bill was sponsored by Reps. Pete Stark, D-Calif., and Dave Camp, R-Mich., the bipartisan leaders of the House Ways and Means health subcommittee, which oversees Medicare. Among its cosponsors were the chairmen of the House Ways and Means Committee, the House Commerce Committee and Minority Leader John Boehner, R-Ohio.

With that kind of heavyweight support, this bill appears to be on a fast track.

Meanwhile, similar heavy support has been expressed in the Senate. Sen. Chuck Grassley, R-Iowa, the ranking Republican on the Senate Finance Committee, inserted an 18-month delay in his Medicare bill addressing physician payments. The committee’s chairman, Sen. Max Baucus, D-Mont., also embraced the delay and promised he would have included the language of the Stark-Camp bill in his version of the Medicare doctor payment bill if it had won today’s cloture vote.

Medicare officials have touted the program — which was mandated in the 2003 Medicare law — as a way of reducing rampant fraud in Medicare bills for medical equipment, and proclaimed that the competitive bids would reduce the average cost for equipment such as oxygen and power wheelchairs by about 26 percent.

Peter Ashkenaz, a spokesman for the Centers for Medicare and Medicaid Services, said, “Any delay in the implementation of the program will delay the savings that Medicare beneficiaries will see when they buy or rent their medial equipment and supplies from fully accredited suppliers.”

But long-time medical equipment suppliers such as John Mieras, vice president of Advance Medical Support Inc., a Palm Beach Gardens-based national mail-order diabetes supply company, said the bid process was severely flawed.

Mieras said the winning bidders, in many cases, were companies that did not have previous experience selling the equipment they were selected to supply and were not licensed to sell in the geographic areas for which they received winning bids.

Furthermore, Mieras said many of the winning bids were based on companies offering “the least expensive generic products straight from China.” Mieras said companies that submitted bids based on the cost of name-brand products were not selected.

“They are taking away all of the choice, and all of the name brands, and all of the top models from everyone on Medicare, and they’re just not telling anybody that,” Mieras said.

Stark said the bill was introduced because “the Bush administration designed this program with blinders on to the needs of beneficiaries and the small companies that make up most of the DME industry. But, as I told the industry from the start, this is no free lunch. This bill requires the DME industry to finance the cost of delaying the program.”

Camp said the implementation of the bid process “has been flawed and needed to be fixed. This bill provides us with the time to get the program right and ensure we are reducing costs while protecting beneficiaries in the long run. Equally important, this bill requires that we move forward with competitive bidding as a way to reduce costs.”

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Medicare bill falls short

By Larry Lipman | Thursday, June 12, 2008, 03:38 PM

Facing a June 30 deadline before scheduled Medicare pay cuts to doctors take effect, the Senate backed away Thursday from a bill that would have increased physicians pay but slashed payments to private managed care plans.

The 54-39 procedural vote, with nine Republicans joining all the Democrats present, fell six votes short of the 60 needed to proceed. Among those not voting were presidential candidates Barack Obama, D-Ill., and John McCain, R-Ariz. Florida Sens. Bill Nelson, a Democrat, voted to proceed; Mel Martinez, a Republican, voted against continuing with the bill.

The votes means the two sides are likely to continue negotiations which have been on-going since last year. The 10.6 percent pay cut — the result of a Medicare formula set up several years ago to limit payments to physicians — originally had been scheduled to take effect at the beginning of this year, but Congress agreed in December to temporarily delay it until July 1 while lawmakers searched for ways to pay for eliminating the cut.

Doctors have repeatedly warned that if the cuts take place, many of them will refuse to accept new Medicare patients.

Congress could agree to simply extend the delay on the pay cuts, but that would mean Medicare’s 44 million beneficiaries would pay higher premiums next year to help finance the higher-than-scheduled payments to doctors this year.

Both parties have offered plans to avert the pay cut, but differ over how to pay for the increase and what impact the increase will have on premiums.

The bill that failed to pass the procedural hurdle was sponsored by Senate Finance Committee Chairman Max Baucus with support from most Democrats and a handful of Republicans. It would avert the pay cut and, instead, increase doctors’ pay rates by 0.5 percent for the remainder of this year and another 1.1 percent in 2009.

But Baucus’ bill would slash payments to private Medicare Advantage managed care plans, which a congressional advisory panel says are paid roughly 13 percent more than for traditional fee-for-service coverage.

The Baucus bill also would include a “hold harmless” provision that would keep the increase in physicians’ payments from being included in calculating next year’s Medicare Part B premiums.

An alternative bill by Sen. Charles Grassley of Iowa, the Finance Committee’s ranking Republican, would also avert the pay cut and raise payments by 0.5 percent this year and 1.1 percent next year.

But Grassley’s bill would not cut Medicare Advantage plans as deeply as Baucus’ and would not prevent Part B premiums from increasing to help pay for the doctors’ pay raise.

Grassley’s bill would also delay for 18 months Medicare’s plan to begin restricting the suppliers of durable medical equipment — such as medical oxygen and power wheelchairs. Baucus promised that he would offer a similar provision if his bill passed the procedural hurdle.

Both the American Medical Association and AARP, the nation’s largest organization for those 50 and older, endorsed Baucus’ bill. But Grassley and other Republicans warned that Baucus’ bill would result in at least a temporary pay cut to doctors because President Bush has threatened to veto any bill that included substantial cuts in Medicare Advantage payments. In that case, Grassley said, a Medicare bill might not be adopted until the fall.

Grassley urged the Senate to defeat the procedural motion to force both sides to continue negotiations. But Senate Majority Leader Harry Reid urged senators to support the motion and attempt to amend the bill on the floor next week.

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