Obama Budget Drops Bomb on HME
President’s 2012 plan calls to link NCB cuts to Medicaid reimbursement rates.
- By David Kopf
- Feb 17, 2011
President Obama has released his 2012 budget, and it proposes to leverage the national competitive bidding program to drive further cuts to HME funding.
Two key proposals in the President’s plan are to tie Medicaid reimbursement rates for HME to the rates generated by CMS’s national competitive bidding program; and to require mandatory pre-payment review for all power wheelchair claims.
When it comes to linking Medicaid rates to NCB rates for HME, the president’s budget says doing so will “strengthen the Medicaid program” and save $6.4 billion over 10 years.
“The Medicare program is in the process of implementing innovative ways to increase efficiency for payment of durable medical equipment (DME) through the durable medical equipment, prosthetic, orthotic items or services (DMEPOS) Competitive Bidding Program, which is expected to save more than $17 billion in Medicare expenditures over ten years,” the President’s plan reads. “The first proposal extends some of these efficiencies to Medicaid, by limiting Federal reimbursement for a State's aggregate Medicaid spending on certain DME services to what Medicare would have paid in the same State for the same services.”
Not surprisingly, the President’s suggestion elicited a strong industry response:
“This proposal would be a disaster for the already-strapped HME sector,” said Tyler Wilson, president and CEO of the American Association for Homecare. “It would merely accelerate the race to the bottom in terms of reduced access to medically required home equipment and services and drive even more qualified home medical equipment providers out of business. As it gets harder and harder to obtain quality equipment and care at home, this ill-conceived idea will merely drive up costs in other parts of our healthcare system such as hospitals, emergency rooms, and long-term care facilities.
The president’s budget listed the implementation of pre-payment review for all power wheelchairs under its “program integrity” section, and projected a $240 million savings over 10 years. The Administration said the reviews would reduce the improper payment rates.
“Preliminary data suggest that the error rate for power wheelchairs is excessively high,” the budget reads. “Payment for equipment that does not meet existing rules for Medicare coverage increases costs for the Medicare program and for taxpayers.”
A statement from AAHomecare said the proposal “heaps additional burdens on power wheelchair providers who are already reeling from severe reimbursement cuts, the loss of the first-month purchase option, and numerous, onerous regulations that second-guess physicians’ orders for power wheelchairs for seniors and people with disabilities.”
All told, the budget prescribes Medicare and Medicaid-related cuts and an expansion of generic drug use to gain a $62 billion savings. These stiff cuts, including those for the HME sector, will help pay for a two-year “doc fix” to increase pay to physicians, that is also included in the budget.
David Kopf is the Editor of HME Business.