August 2010 - PWC Purchase Option Delay Still Possible
From HomeCare Monday - EXETER, Pa
Instead of introducing a bill to delay elimination of the first-month purchase option for power wheelchairs, stakeholders are now hoping the measure can hitch a ride on another legislative vehicle.
Seth Johnson, vice president of government affairs for Pride Mobility Products, Exeter, Pa., said advocates continue to meet with lawmakers about the issue. However, he said Friday, “we have been advised not to introduce separate legislation.”
Mandated by the Patient Protection and Affordable Care Act, the first-month purchase option for Group 2 PWCs will be eliminated Jan. 1, 2011. Stakeholders have been working diligently to stave off the elimination and have agreed to “pay for” what the Congressional Budget Office scored as a cost for the delay—$50 million for 12 months—by taking a 1 percent cut in their portion of the CPI update.
A year-long delay would give mobility providers time to adjust business models, and give CMS time to put together guidance on the change. While industry negotiators had been working to get an author for a bill calling for the delay, Johnson said they have now been told they would be better off with a letter from concerned congressional members alerting key committees to the issue.
“We hear from legislators that it is a very reasonable request and it is budget-neutral,” Johnson said. “There’s been no opposition raised. The biggest hurdle is identifying a vehicle that will move this year to attach it to.”
Such a legislative vehicle could be a Medicare clean-up bill that would take care of a number of health care provisions that need to be extended or somehow addressed, he said.
“I feel much more confident than I did a few weeks ago,” Johnson said. “There are opportunities as to the purchase option. Congress is still in session, and we’ll continue to reach out to our legislators and get them to formalize their support.”
January 2010 - Both the House and Senate healthcare bills include a provision that would eliminate the first month purchase option on Group 2 and below power wheelchairs. The effect of these proposals would cause many Americans with disabilities and seniors to go without the mobility equipment they need because their providers would not be able afford to provide power wheelchairs. Below is an update from AAHomecare.
Congressional Committee Proposes Way to Preserve First-Month Purchase Option for Wheelchairs and Meet Cost-Cutting Target
The House and Senate health care reform bills have provisions that would eliminate the first-month purchase option for standard power wheelchairs. Both bills would force wheelchair providers to seek private financing to cover operational expenses and the cost of purchasing a power wheelchair while it is being paid for over the 13-month Medicare rental period.
Elimination of the first-month option would have serious repercussions for all power wheelchair providers and would set a bad precedent for the entire mobility community. The non-partisan Congressional Budget Office (CBO) estimates that elimination of the first-month purchase option, as proposed in the House and Senate bills, would save the Medicare program $800 million over the 10-year budget window.
Over the past several months, AAHomecare’s Complex Rehab and Mobility Council (CRMC) – a policy group open to participation by all members of the Association – has worked with several Senate lawmakers to identify a Medicare-savings alternative that would preserve the first-month purchase option. The challenge for the HME sector has been precisely how to hang on to the purchase option while still allowing Congress to shave $800 million from Medicare expenditures on standard power wheelchairs.
Yesterday, a key congressional committee proposed setting updated reimbursement rates for standard power wheelchair base codes in 2011 through 2014 at the consumer price index-urban (CPI-U) less 3.5 percent. So if the CPI-U were 2 percent in 2011, the update for standard power wheelchair base codes would be negative 1.5 percent for that year. These payment adjustments would save the Medicare program $800 million over 10 years, according to the CBO. This proposal would allow the first-month purchase option to remain in place.
While the new alternative reduces payment rates, the reductions will be mitigated by the extent of CPI-U updates over the four targeted years. AAHomecare’s CRMC supports the alternative given the critical importance of the first-month purchase option to both power wheelchair providers and users.
Now that Senate lawmakers have a way to fend off the loss of the purchase option with an alternative that provides the same $800 million savings, there is the opportunity to get that proposal inserted into the House and Senate health care reform package. AAHomecare urges all HME providers who value the purchase option to make their preference known to their members of Congress. Tell your Representatives and Senators that (1) you want the first-month purchase option to remain in place and (2) to support the Senate-proposed alternative that achieves the same level of savings.
If you have questions about this proposal, contact AAHomecare’s Walter Gorski at waltg@aahomecare.org.
December 2009 - Complex Rehab and Mobility Council (CRMC): discussion on how to preserve the 1st month purchase option for Power Mobility
GAMES member Don Bates of Fuller Rehab attended an emergency call with AAHomecare’s Complex Rehab and Mobility Council (CRMC) on Friday December 11. Tyler Wilson called the meeting based on some recent developments on Capitol Hill regarding the “clawback” proposal (relating to the first-month purchase option for power mobility).
Don Bates offered this recap:
The CRMC council of AAHomecare had a conference call yesterday.
1. Elimination of the purchase option for consumer power was scored by CBO to save $800 million over 10 yrs.
2. The clawback proposal to preserve the purchase option was introduced in SA 2941 by Senator Arlen Specter.
3. It was expected to save $650 million over 10 yrs..
4. The CBO scored the clawback to save only $200 million over 10 yrs.
5. The clawback is now a dead issue.
6. The council agreed for Seth Johnson to work with Senator Specter’s office on an amendment that would include a small digit % reduction over 4 to 5 yrs.
7. Any reduction exceeding 3.5% per year over 4 yrs will not be acceptable and the council will re-convene for further discussion.
8. We are awaiting a report from Seth.
CLICK HERE to read additional notes from the meeting provided by Alexandra Bennewith of AAHomecare.
OIG Slams PWC Payments, Pushes Competitive Bidding
From Homecare Magazine -Sep 3, 2009 10:03 AM
WASHINGTON — Medicare reimbursed almost four times the amount providers paid for standard power wheelchairs in 2007, according to a new report from HHS' Office of Inspector General.
"Medicare allowed an average of $4,018 for standard power wheelchairs that cost suppliers an average of $1,048 in the first half of 2007," the report found. "Medicare and its beneficiaries paid suppliers an average of $2,970 beyond the supplier's acquisition cost to perform an average of five services and cover general business costs."
That amounts to 383 percent of the average acquisition cost for PWCs, the OIG calculated.
The report, issued yesterday, also said Medicare paid twice as much for complex rehab PWC packages (the power wheelchair plus power options and accessories) as providers paid to buy them: "Medicare allowed an average of $11,507 for complex rehabilitation power wheelchair packages that cost suppliers an average of $5,880 in the first half of 2007."
What's more, according to the OIG, Medicare could have significantly lowered its expenditures for PWCs — $688 million during 2007's first half — under competitive bidding by cutting its allowable for standard power chairs by nearly $1,000 to an average $3,073.
The report pointed out the 9.5 percent DME cut enacted after Congress' delay of the bidding program to make up for what Medicare would have saved had it continued. However, the OIG said, even though PWC reimbursements were reduced, "the 2009 fee schedule amount exceeds the average competitively bid price by $568."
As a result of its findings, the OIG recommended that CMS "determine whether Medicare's standard and complex rehabilitation power wheelchair fee schedule amounts should be adjusted by using information from the Competitive Bidding Acquisition Program, seeking legislation to ensure that fee schedule amounts are reasonable and responsive to market changes, or by using its inherent reasonableness authority."
CMS concurred with the recommendations.
But that wasn't the end of the bad news for the HME industry. Within hours of its release, CNN posted a story on the OIG report and noted its own July investigation, which found a Medicare "patient and taxpayers were billed about $1,200 over four years for a nonmotorized chair, while a nearly identical chair could be bought from the same supplier for $349."
Read the entire OIG study, titled "Power Wheelchairs in the Medicare Program: Supplier Acquisition Costs and Services,"
CLICK HERE .
July 2009- Update from GAMES member, Don Bates
As we all know, the Senate Finance Committee and the House Tri-Committee on Health Reform have included in their Health Care Reform Drafts a provision to eliminate the purchase option on power wheelchairs. The house version was scored by CBO to save the Medicare program $900 million over 10 years. I have not seen the Senate version scoring.
The Senate version excludes complex rehab and frontloads payments 45% in the first three months.
I believe that all of you agree this provision could be very damaging to the power mobility industry and to the quality of products and service available to Medicare beneficiaries who require power mobility devices.
I have visited and spoken several times with John Barrow’s office (Hill Thomas) and Bart Gordon’s office (Dana Lichtenberg) about leading an effort in the Energy and Commerce Committee to remove this provision from the draft. Both have ultimately declined stating that they are wrapped up with too many other time consuming issues already.
I have also communicated with Michaeleen Crowell in John Lewis’ office. She understands the issue and we will be talking this week on a possible course of action through House Ways and Means.
On the Senate side, both of our Senators have expressed a desire to help remove the provision. I have also been in touch with Senator Blanche Lincoln’s (D, AR) office and got some positive feedback there. I am hoping she can weigh in with Senator Baucus and get us some momentum.
I am interested in any efforts our members have made and what kind of feedback you have received.
Any new ideas would be appreciated.
Don Bates
Executive Vice President
Industry Affairs & Compliance
Fuller Rehabilitation & Consulting Services, Inc.
Office 706-965-0304
Cell 423-593-8369
CLICK HERE to read a previous letter to Senate Finance from AAHomecare - July 2009.
CLICK HERE for AAHomecare’s letter to the House committees overseeing health care reform.
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