Editor's Note

More of a Bad Thing

The President's proposed 2017 budget doubles down on the wrong ideas.

• By David Kopf
• Mar 01, 2016

As we prepared this issue of HME Business to go to press, President Obama submitted a $4.1 trillion budget for 2017 to Congress, and it contained several items that spelled bad news for the HME industry.

The budget was essentially dead on arrival when a basically hostile Congress received it the week before President’s Day weekend. In fact, Congress didn’t exactly “receive” the budget. The budget committees of both the Republican-led House and Senate made the unprecedented move of refusing to give the budget a formal hearing. Since the 1970s, Congress has held hearings on formally submitted Presidential budget package, so not giving the budget a hearing was a bit of a historic snub, and the rejection left the President’s budget in limbo.

While many of us might be sick of the bicameral gridlock that has practically paralyzed the 112th, 113th and 114th Congresses, maybe a big, fat partisan “no” is a good thing when it comes to the President’s 2017 budget, because several provisions of the package would harm the home medical equipment industry and its patients. In fact, the American Association for Homecare reviewed the budget and found several items that should raise eyebrows in the HME community.

A Laundry List of Bad Ideas

To begin with, the budget would expand competitive bidding to cover a broader range of DME product categories. The additional categories itemized in the budget included inhalation drugs, all prosthetics and orthotics, and ostomy, tracheostomy, and urological supplies.

Competitively bid prosthetics? Really? All in all, the budget, which included input from Health and Human Services, says it could save $3.8 billion over 10 years with such an expansion. Once again, we are given blue-sky dollar figures that don’t incorporate the damage competitive bidding has done to patient access to home medical equipment, and ignore the cost of ER visits and hospital stays that result from that diminished access.

The budget would also repeal the 36-month rental cap on oxygen equipment while reducing the monthly payment amount for oxygen and oxygen equipment by the necessary percentage to be budget neutral.

The budget’s stated goal is to improve beneficiary access to care, particularly when a patient relocates during the 36‐month period, but a big question is by what percentage would funding be cut for the provision to achieve budget neutrality? I find this provision particularly galling, because now that CMS has made a complete mess by creating a situation that strands patients after providers no longer have to care for them free of charge, it wants providers to pay to clean up that mess.

More Audit Headaches

The President’s budget also includes provisions aimed at strengthening CMS’s and states’ ability to fight fraud, waste, abuse, and improper Medicare payments. The proposal estimates $1.4 billion in PAYGO costs and $3.3 billion in non‐PAYGO savings over 10 years. I can’t help but read that as more audit headaches to come, and an even longer line of appeals sitting in limbo at the Office of Medicare Hearings and Appeals while OMHA’s administrative law judges churn through a backlog of cases that is literally years long.

Speaking of that appeals backlog, accompanying those program integrity provisions is a long list of provisions concerning Medicare appeals. You can read more about those items at bit. ly/2017presbudget, but the general upshot is that HHS and President Obama seek to address the massive backlog of appeals that an out-of-control audit program has created by making it much harder for providers to appeal claims, rather than addressing the flaws in the audit program that allow audit contractors to generate mountains of spurious recoupments that require appealing.

The President’s budget did include one bright point: The 2017 plan asked for $32 million to create a state-level Assistive Technology Program that would provide financial assistance to increase patient access to assistive technology devices and services. These devices include aids to help patients use computers and other technology devices, modified driving controls, and DME such as wheelchairs and walkers.

But that’s a weak trade-off for a long list of harmful propositions. While I’m a big believer in bi-partisan compromise, I’m not a supporter of bad public policy. I hope Congress’s recalcitrance forces the Executive to go back to the drawing board.

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