President Bush's 2008 Budget Proposal Elicits Industry Outcries
On Feb. 5, President Bush unveiled the administration's FY 2008 budget proposal to Congress. The proposal outlined a reduction in the rental period for most oxygen equipment from 36 to 13 months and the establishment of a 13-month rental period for power wheelchairs.
On the heels of the proposal, the industry lashed out against further cuts in reimbursement.
"Home care provides a clear path to more cost-effective care in Medicare and Medicaid," stated Tyler Wilson, president and CEO of the American Association for Homecare (AAHomecare). "Home care delivers value for every health care dollar and is clinically effective and preferred by patients and families. These proposed cuts serve only to hobble the home care infrastructure that this nation desperately needs."
Oxygen
A group of organizations representing home oxygen therapy patients, physicians, home oxygen providers and oxygen system manufacturers — including AAHomecare, the National Association for Medical Direction of Respiratory Care and National Home Oxygen Patients Association — issued a statement opposing provisions that would threaten the home oxygen therapy benefit in Medicare.
The group says the proposal would force Medicare recipients to assume the burden of owning and managing medical oxygen equipment in their homes after only 13 months of use.
In the statement, the group said, "We believe the proposed change in payment methodology places an unfair, unsafe and unrealistic burden on the beneficiary."
The group is deeply concerned that Medicare policy is increasingly at odds with the clinical needs of home oxygen therapy patients, as well as physicians' and home oxygen providers' ability to deliver optimal home respiratory care.
"The president's proposed budget significantly impacts citizens least able to manage ownership of respiratory medical equipment," said Jon Tiger, president of the National Home Oxygen Patients Association. "It leaves them without a network to ensure proper functioning of the equipment and to whom concerns can be raised. The proposal also removes the incentive for manufacturers to continually improve their equipment and will result in used prescription equipment ending up in the secondary market."
In another statement issued by the Council for Quality Respiratory Care (CQRC), Mark Shreve, CEO of the Coalition for Pulmonary Fibrosis, said, "Cuts of this magnitude have the potential to disrupt the quality and continuity of care for our patients. We urge Congress to reject this provision in the president's budget to ensure that patients are able to access the services they need to survive. We simply cannot afford to disrupt continuity of care for this very fragile population."
On the bright side, the proposal remains consistent with the new payment system for home oxygen that took effect Jan. 1. The new rule promotes the provision of new oxygen technology, including home filling systems.
Invacare applauded the administration's support of new technology, but voiced opposition to cuts in home oxygen therapy. The manufacturer pointed out that the budget proposal's silence on this issue sends a clear signal to Congress that the administration does not oppose reversal of the mandatory beneficiary ownership provision.
Invacare also noted that the oxygen proposal is estimated to save about $2.4 billion over five years. This a significant reduction in the cost savings estimate from previous years, when a 13-month cap on oxygen was scored at more than $6 billion over five years.
Cara Bachenheimer, Invacare's vice president of Government Relations, said, "Invacare has been actively working with Congress to keep all oxygen reimbursed at 36 months and we will continue to do so. We've also been actively working with HHS and the administration to educate them about the cost and consumer benefits of new technology such as the Homefill system. Although many details need to be worked out, we are excited that the administration's proposed budget demonstrates an understanding of the benefits of new oxygen technology, which gives oxygen patients greater independence and mobility. By maintaining reimbursement at 36 months for new technologies, seniors will continue to have access to this patient-preferred technology."
Power Wheelchairs
Invacare expressed disappointed in the elimination of the first-month purchase option for power wheelchairs that beneficiaries with long-term needs typically exercise, stating that the proposal would limit beneficiary access. While this proposal is estimated to save approximately $500 million over five years, the provision will likely cost Medicare and beneficiaries an estimated 5 percent more than maintaining the first-month purchase option.
AAHomecare said that the Senate debated a provision to eliminate the first-month purchase option for power wheelchairs in October 2005, but decided to reject this policy change in the budget reconciliation package. The amendment was defeated based on the following reasons:
- Beneficiaries in need of power mobility devices suffer from long-term debilitating conditions that are not short-term in nature.
- Many power wheelchairs are custom-configured and individualized for the patient. These are not commodity items.
- Eliminating the first-month purchase option would severely curtail beneficiary access as the supplier will be unable to cover the significant up-front service costs that go into the provision of the most appropriate power mobility device to accommodate the beneficiary's needs.
- More than 95 percent of all power wheelchairs are purchased in the first month because beneficiaries who meet the coverage criteria have long-term life needs.
AAHomecare recommended that Congress reject the administration's proposal and maintain the first-month purchase option for power wheelchairs to ensure beneficiary access and cost savings to the Medicare program.
To view the president's HHS budget narrative, visit www.hhs.gov/budget/08budget/2008BudgetInBrief.pdf.
This article originally appeared in the February 2007 issue of HME Business.