Medicare Compliance & Reimbursement

Politicians in Washington, DC are getting down to business in figuring out how to pay for Medicare's physician payment adjustment, and it could be oxygen and wheelchair suppliers who suffer.

Home health agencies, hospices and durable medical equipment suppliers have all feared receiving payment cuts in the bill that will avert the 10 percent cut to physician payment rates set to go into effect July 1. But in Democrats' first pass at a bill (S. 3101), just oxygen and wheelchair providers' fears are realized.

Nearly $10 Billion Could Delay Cuts

The winners: The bill that Senate Finance Committee Chair Max Baucus (D-MT) introduced June 6 calls for nearly $10 billion to delay the doc rate cut for 18 months and increase rates 1 percent.

To pay for the change, the legislation mostly relies on Medicare Advantage cuts. But it also taps other unlucky providers, including some home care ones.

The losers: The bill calls for oxygen suppliers to retain the title of oxygen equipment when beneficiaries no longer need it, according to a summary of the legislation. And it "reforms the oxygen payment system to better reflect appropriate payment for medically necessary products and services," the Committee's summary says.

The bill would reduce payment rates for stationary concentrators to about $144 a month from the current rate of $198 a month, explains the National Association for Home Care & Hospice. But rates for portable equipment would increase from $32 a month to $77.

"Combined payment for stationary concentrators plus portable equipment would be $222 a month, compared to the current rate of $230 a month," NAHC concludes.

Wheelchair Payments Could Drop 7.5 Percent

The bill also proposes to eliminate the first month purchase option for power wheelchairs, except for complex rehab chairs, the Committee says. The legislation would actually increase power wheelchair payments in the first three months of the rental period from 10 to 15 percent, but payments in the remaining 10 months would drop up to 7.5 percent.

Optimistic: While budget bills are notorious for last-minute changes, things are looking promising for HHAs and hospices in this legislation, NAHC judges. "Indications ... are good that the Medicare package, as it did last year, will preserve the home health and hospice inflation updates," the trade group cheers.

The bill contains other provisions that could affect home care, including a ban on deceptive Medicare Advantage marketing, an extension of the Part B therapy cap exceptions process, and a demonstration project to coordinate care including home care.

Bill Faces Veto Challenge

Horizon cloudy: But the bill's path to law is far from clear. When Baucus broke off bipartisan negotiations on the bill a few weeks ago, the Bush Administration stated the President's intention to veto any bill that includes MA plan cuts.

The legislation "makes smart changes to stop overpayments to private plans that are getting more than their share of taxpayer dollars," Baucus says in a release.

Republicans To Introduce Alternative

Senate Republicans will shortly introduce a similar bill averting the physician pay cut with different funding sources, according to press reports.

Negotiations among the lawmakers will have to proceed quickly to avoid the July 1 deadline, observers note.

Until a Medicare bill is signed into law, all home care providers' payment rates are at risk.

Bonus: There's also a chance for positive changes. Sen. Baucus is seriously considering reinstating the 5 percent rural add-on for HHAs in the bill, NAHC reports.

Note: A summary of the bill is online at http://finance.senate.gov/press/Bpress/2008press/prb060608a.pdf.