On Monday, the President released his budget request for Fiscal Year 2008. The legislative proposals called for in the President`s budget would save $65.6 Billion in Medicare over a five year period and $13 billion over five years in the Medicaid program. In the area of DME, the budget would eliminate the day one purchase option for power wheelchairs for a one-year savings of $70 million and a five-year savings of $530 million. In other DME, the budget proposal would reduce the rental period for oxygen equipment from 36 months to 13 months for a one-year savings of $110 million and a five-year savings of $2.3 billion.
For the first time, the budget request includes $45.5 million to establish the administrative structure to support DME competitive bidding, slated to begin in the 10 largest MSAs later this year. According to the budget document, DME competitive bidding is projected to yield savings totaling about $1.7 billion over the next five years.
It is important to note that the President`s Budget is simply his outline of budget priorities for the coming fiscal year. The power wheelchair language along with any other provisions require Congress to act thorough inserting such language into a Medicare bill and passing it prior to being implemented into law. The House and Senate Democrats have expressed significant concerns with the President`s proposed Budget and have indicated that they do not believe it moves America in the right direction. It is very unlikely that a Medicare bill will be voted on by the full House or Senate prior to September of this year. Multiple Medicare hearings are expected in the spring and markup of a Medicare bill is likely to emerge in late June/early July.
Needless to say, the estimated savings brought by eliminating the first month purchase option for PMDs will definitely be challenged. The following is a sample of the proposed rationale for our arguments:
*With the 25% on average reduction to the PMD fee schedule late last year, the savings estimate is overstated.
· Beneficiaries in need of power mobility devices suffer from long-term debilitating conditions that are not short time 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 beneficiaries needs.
· Over 95% of all power wheelchairs are purchased in the first month (the provider gives the patient the option to either rent or purchase the power wheelchair upon initial issue and the patient elects the purchase option)
· Medicare should either maintain the current first month purchase option for power wheelchairs or move them to the “inexpensive or routinely purchased” payment category of DME. The current Medicare requirement for items to be placed in the “inexpensive or routinely purchased” payment category is evidence that the item is purchased at least 75 percent of the time.
· The current average allowable for K0823 power chairs is approx. $4023.70/unit. By eliminating the purchase option and making these power wheelchairs rentals, the total allowable for 13 months rental would be $4224.91 ($402.37/months 1-3; $301.78/months 4-13). The Medicare program pays more for power wheelchairs under this provision.
Hearings on the budget proposal in both the House of Representatives and the Senate are tentatively scheduled for later this month.
To view the President’s budget proposal for the Department of Health and Human Services, Click Here