Sizing up the Super Committee

• By David Kopf
• Oct 01, 2011

Of course competitive bidding isn’t the only funding threat that providers must deal with in the immediate future. Apart from audits, removal of the first-month purchase option for standard power mobility and countless other Medicare funding pitfalls that have recently affected providers, there is one potential threat to the industry that sprang up almost out of nowhere: Congress’s bicameral and bipartisan “super committee.” The super committee is tasked with developing a budget plan that Congress must vote on and the President sign into law before the end of the year.

The Super committee was created as part of the budget and debt-ceiling agreement approved by Congress and signed into law by President Obama in August, and it could mean more funding trouble for the HME industry.

Currently, HME providers’ funding is safe under the shortterm budget agreement. While the current agreement includes $900 billion in that must be implemented over the next 10 years, Medicare funding is not part of those cuts.

However, the budget still leaves an additional $1.2 trillion deficit, which the joint House-Senate super committee must address with additional cuts or income. The lawmakers formulating that plan are:

• Co-chair Rep. Jeb Hensarling (R-Texas)
• Co-chair Sen. Patty Murray (D-Wash.)
• Rep. Chris Van Hollen (D-Md.)
• Sen. Jon Kyl of (R-Ariz.)
• Sen. John Kerry (D-Mass.)
• Sen. Pat Toomey (R-Pa.)
• Sen. Max Baucus of (D-Mont.)
• Sen. Rob Portman (R-Ohio)
• Rep. Xavier Becerra (D-Calif.)
• Rep. Dave Camp (R-Mich.)
• Rep. James Clyburn (D-S.C.)
• Rep. Fred Upton (R-Mich.)

In terms of a timetable, the super committee must cover that $1.2 trillion gap by Thanksgiving, and then Congress much approve those cuts by December 23. And, much like Tom Turkey or a Christmas goose, Medicare could be on the chopping block.

This is what has the industry worried. Gauging exactly how large a threat the super committee’s efforts pose to the industry is somewhat of an unknown, but given the current political climate of cutting federal programs, there’s a good chance Medicare could get hit.

“We know for a fact that they’re going to be looking for Medicare and Medicaid cuts,” says Ton Ryan, president and CEO of Homecare Concepts. “I think the HME community could certainly face further cuts.”

“The super committee poses a very large threat to suppliers,” says Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers. “With the current position of CMS, the committee will be lobbied by them to hold the current CB program as it is. Second, they will most likely move to make the competitive bidding reduction apply to Medicaid and also to go to a pre-pay audit for most power mobility.

“I will not be surprised to see additional cuts proposed to DME including across-theboard fee cuts and a reduction in the cap on oxygen,” Stanfield adds. “We cannot count on anything with this group. There is little suppliers can do. This super committee will be out of reach of most lobby efforts and will be listening more to party leaders than constituents.”

Ryan notes that threat remains very real even if the super committee cannot develop a budget that Congress and the President approve, because in such an event, there are requirements built into the debt ceiling agreement that force automatic budget cuts. In that case, Medicare is automatically cut by 2 percent. And in fact, that could be the least harmful outcome.

The flip-side is that if the committee hopes to address other Medicare-related funding conundrums, such as the physicians doc fix, then it could target HME with even bigger cuts as an offset. So, then the question becomes, can the industry convince the super committee that homecare cannot sustain further cuts, or will those efforts fall on deaf ears in a cut-happy Congress?

“There are some good people on that committee who are our friends, and there are some who are not,” Ryan notes. “So we shall see.”

One thing working in the industry’s favor is that with competitive bidding already promising to save $20 billion, it’s tough to see where the super committee could identify further cuts. Regardless, that doesn’t mean providers shouldn’t contact super committee members to drive home the importance of homecare.

In terms of methodology, the super committee needs to work fast. The way it will decide what cuts to propose is largely through reviewing proposals that have been made in the past for possible inclusion in the committee’s list of cuts, and there are some unimplemented cuts that could be discussed. One idea that have been kicked around are prepayment review for all power mobility claims, says Kirsten DeLay, senior vice president of Sales Management and Operational Planning for Pride Mobility Products.

“Our broad concern is this would greatly increase the amount of turnaround time before they would see payment from Medicare,” she says. “On top of all the cuts we’ve had and the removal of the first-month purchase option.”

Another possible cut would be to apply the competitive bid rates from Round One to the Medicaid programs in the states impacted by Round One, says Kirsten DeLay, senior vice president of Sales Management and Operational Planning for Pride Mobility Products.

All the more reason providers need to reach out to lawmakers to drive home the value of homecare.

“I don’t know where [committee members] would cut, but that doesn’t mean they couldn’t do something naïve,” Will says. “Providers need to figure out who in their district they should be talking to educate them about our business, the services they provide and the people with disabilities they benefit, so that they don’t make an irrational or uniformed decision. We need to reach out an educate our members of Congress.”

And a key way to do that is by explaining how greatly this could impact employment, DeLay says.

“We need providers to get in touch with their legislators to let them know how further reductions are going to have an impact on their business, number one, but number two, on jobs that they are currently filling,” she says. “The Administration has made it very clear that it is focused on improving the unemployment rate and increasing jobs, and everything the super committee is going to look at related to our industry is going to impact providers’ viability to do business well and, in turn will impact jobs and the care that patients get.”

This article originally appeared in the October 2011 issue of HME Business.