Business Solutions

The Rural Relief Rethink

A last-minute hold stalls out rural providers' reprieve from full bid expansion cuts. Now the industry and its allies need to think up a new strategy.

Rural ReliefThe HME industry suffered two heartbreaking setbacks in its battle to stop the brunt of national bidding expansions’ full reimbursement cuts from impacting rural providers and their patients.

However the industry’s leadership and its allies on Capitol Hill are working on yet another plan to protect rural HMEs, and the big questions on everyone’s mind are can they pull it off, and will rural providers be able to hold on despite having to suffer the cuts through the summer?

To get an idea of what the answers to those questions might be, it’s worth looking at what exactly happened to rural reform.

How Things Played Out

Initially, the outlook for rural relief looked pretty positive. The Senate passed S.2736, its half of the Patient Access to Durable Medical Equipment Act of 2016. That legislation aimed to do a few things:

  • Delay bid expansion’s second round of cuts for HME items in non-bid areas by 12 months, from July 1 until at least July 1, 2017.
  • Lock in the bid ceiling for future rounds of bidding at the levels established at the bid rates in effect on July 1 instead of CMS’ current plan to limit future bid ceilings to the previous bid round rates.
  • Require CMS to solicit stakeholder input and consider travel costs, volume and clearing price, as well as the numbers of providers serving bid areas, when setting rates for January 2019 and beyond.
  • Require CMS to monitor and provide monthly online updates regarding Medicare beneficiaries’ access to HME and their health outcomes related to HME.
  • Advance the start date of the federal portion of Medicaid reimbursement mirroring Medicare rates by three months from calendar year 2019 (Jan. 1) to fiscal year 2019 (Oct. 1, 2018).

The Senate passed the bill via voice vote and referred it to the House, which was deliberating on the legislation. A key sticking point was the delay. The House wanted to pass H.R. 5210, its version of PADME, with a three-month delay on the second round of cuts, rather than a 12-month delay.

The industry was able to work with key champions in the House to advance the legislation, and after the deliberation, it looked as though the House was all set to approve rural reform with the shorter delay.

Then the unexpected happend: In the wake of the Orlando, Fla. nightclub shooting, Democratic lawmakers, frustrated over a lack of gun control legislation, took an unprecedented step to stage a “sit in” of the House. The result? The House went into its planned recess, which lasted until July 5, and the July 1 cuts went into effect. Rural providers were now officially in the last spot they wanted to be: having to work under national bid expansion cuts.

The Fight Continues

Fortunately, the industry has a “never say die” attitude and continued working on a fix that could either be applied retroactively or going forward. Knowing they had almost secured PADME, industry advocates and their Congressional allies went into a full court press to advance some kind of rural reform “after the fact.”

And the effort was successful. Directly after the Independence Day break, the House Representatives voted to approve an amended version of the Patient Access to Durable Medical Equipment Act of 2016 (H.R. 5210), that would delay national bidding expansion’s second round of cuts to Sept. 30. But time was tight, given that the House and Senate would again go on recess from July 15 until the first week of September. The industry had limited time to push the Senate to pass the same package as the House.

And that was a sticking point, because the Senate had passed the earlier delay to July 2017. Would Senate lawmakers support a delay that only extended until Sept. 30 of this year?

It turns out they did. After some wrangling, the Senate “hotlined” compromise rural relief legislation — a process that typically results in easy approval for a bill. When a bill is hotlined, it means the bill is considered non-controversial and is essentially automatically approved unless there is considerable objection. Senators have 24 hours to object to the legislation, or hold for questions, otherwise it is considered passed.

In the case of the Senate compromise, it appeared that all systems were go and that the bill would be on President Obama’s desk in time to be signed into law before the Congressional break.

And then it happened — again. Another completely unforeseen surprise undermined the industry’s efforts. A yet unknown (as of press time) Democratic Senator placed a hold for inquiry (which are anonymous) on the legislation at shortly after 4 p.m. Eastern Time on that afternoon. The Senate recessed early the following day, and rural reform was stalled for a second time.


For a smaller industry that had worked so hard, the second surprise setback was almost too much to bear. The reversal was a gut-wrenching blow for providers and industry advocates that had worked to advance the legislation despite the July 1 implementation date having come and gone.

“The bill cleared on the Republican side and did not clear on the Democrat side,” says Seth Johnson, senior vice president of government affairs for Pride Mobility Products Corp. “… It did not pass the Senate via the hotline process due to what appears to be one Senator who held up the rural relief prior to the eight-week Congressional recess. Very, very disappointing.”

“We’re very disappointed and quite amazed given that we got a larger bill passed in the Senate several weeks ago, and a smaller one didn’t go through,” says Tom Ryan, president and CEO of the American Association for Homecare. “At 4 in the afternoon, there were no holds, and then all of a sudden we were getting notifications that there was a hold.”

“[That] was not the end of the week that we were anticipating,” says Cara Bachenheimer, senior vice president of Government Relations for Invacare Corp. “We thought things were going to move along very smoothly. If you’ll remember the Senate approved a 12-month delay three weeks before. … At this point we have very limited information in terms of exactly who put the hold on it, besides it being a Democratic Senator, and exactly why. We have a lot of leadership Democrats calling around today in hopes of uncovering that mystery.”

Re-Shaping the Strategy

The industry still has the ability to fight for some form of rural relief reform when lawmakers return from their summer recess. There is a window of opportunity between lawmakers’ return to Washington in early September and the November elections to push through some form of relief, so the industry is already working with its Senate and House champions to determine a plan.

“Providers are aghast and everyone is in a state of disbelief, but we know we still have to fight this thing,” Ryan says. “We had a lobbying call this morning [July 15]; we regrouped. AAHomecare is 1,000 percent behind moving forward. I reengaged our lobbyist for the fight.”

“We’re already hearing from our Congressional champions that they too are extremely disappointed,” Johnson says. “And, from their perspective, they want to provide a longer term solution, which they were planning to do even with the three-month delay.”

But for the summer recess, rural providers will have to soldier on, figure out a workable way to run their businesses, and care for their patients as best they can under the cuts that were implemented on July 1. While that is a difficult position for providers, the industry is not out of the game. Much work can be done during the summer to keep the industry going.

“The fact is that the law didn’t get passed by the Senate,” Bachenheimer says. “So nothing is getting the President’s signature on this issue. … From the providers’ perspective the July 1 cuts are in place now.

“It ended in a way that we’re obviously not happy with,” she continued. “But … when you look at how far we came, the amount of energy, grassroots, grasstops, industry lobbyist all working in a coordinated way — we got to a point where you can’t discount all that hard work and how effective that was. It’s amazing how far we got, and that’s our strength on a go-forward basis.”

“We’ve never been in a better position in some respects,” Ryan says. “With the champions we’ve had on the Hill. We’ve had high-level Republicans and Democrats working for us.”

And the industry can wield that considerable political capital once lawmakers return to the Hill in September. Between now and then, Ryan says providers should not give up hope. They must keep in mind that the industry is in a very good position to resume the fight in D.C., and in the meantime they and their patients should remain in contact with their lawmakers to remind them of the dire stakes of bid expansion now in place.

“Keep the noise level up,” he explains. “I know it’s difficult. Providers are worn out; they’re beat up; they’re making tough, tough decisions every single day that affect their personnel; and it’s hard to keep engaging in a legislative battle.

“We have high-level support, and there is an understanding that his has to be fixed,” he continues. “Let us work it inside this crazy town, but we need everybody across the country to take this time this summer and let their outrage out and let [lawmakers] know that this has to be fixed.”

This article originally appeared in the August 2016 issue of HME Business.

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