Eleventh-hour efforts by Rep. David Hobson (R-Ohio) to craft language mitigating a reduction in payments for five DME product services appear to have fallen short, as the House and Senate prepare to begin floor debate on the Medicare bill.

If changes are not made, Hobson plans to vote against the "Medicare Prescription Drug & Modernization Act" of 2003, stakeholders contend. As of Nov. 21, the House and Senate were set to vote on the bill.

Diabetes testing strips and lancets, standard and powered-wheelchairs, hospital beds, oxygen and nebulizers would be adjusted to reflect prices paid under the Federal Employees Health Benefits Plan (FEHBP) starting in 2005, according to a Nov. 20 ¹ conference report.

Spurred by Elyria, Ohio-based power wheelchair manufacturer Invacare, Hobson sought to add $1 bil. to the durable medical equipment competitive bidding provision to eliminate the reduction caused by the FEHBP plan pricing.

Invacare maintains that prices would be significantly reduced under the policy based on flawed methodology and that the language inadequately explains which particular plans would be used to set the payment rates.

Furthermore, stakeholders caution that the agreement to adjust five services to reflect prices paid under FEHBP - a provision not included in either the House or Senate version of the bill - is based on faulty methodology from a June 2002 HHS Office of the Inspector General report.

The OIG report found that Medicare payment was higher than the median Veteran Administration, FEHBP and Medicaid prices for the majority of 16 DME items reviewed (² Also see "Sen. Harkin, CMS Urge Medicare Competitive Bidding Bill This Session" - Medtech Insight, 17 June, 2002., p. 8).

The report showed a 4% difference in price for diabetes testing strips between Medicare and FEHBP. However, significant savings will be realized due to an increasing number of diabetics, according to stakeholders.

The legislation also would freeze DME equipment rates for three years from 2004-2006. Following the freeze, DME competitive bidding would begin in as many as 10 metropolitan statistical areas in 2007, and in 2009 could grow to 80 MSAs for the five services.

Also in jeopardy are stakeholder efforts to work with legislator on language allowing HHS to exempt services from competitive bidding, if access to technology is undermined.

By drafting exclusionary criteria, diabetes product manufacturers would be able to present data demonstrating that the ability of monitors to prevent blindness and amputation could be compromised if access to lancets and testing strips are limited through competitive bidding.

Device stakeholders would prefer that the competitive bidding provision be dropped altogether, but face an insurmountable battle in recruiting legislators to scuttle the $6.8 bil. cost-saving measure.

If the bill passes, Invacare plans to lobby Congress in future years to prevent competitive bidding. The firm emphasizes that small manufacturers will be forced out of business with the enactment of the policy.

In addition, diabetes advocates assert that limiting access through competitive bidding runs contrary to HHS diabetes initiatives, including disease manage-ment programs encouraging diabetes monitoring.

Stakeholders are particularly concerned that patients requiring different monitoring features - a large display screen or a voice activator, for example - will face restricted access if cost is the sole consideration.

However, the American Diabetes Association readily endorsed the legislation Nov. 21, citing diabetes diagnostic screening provisions for at-risk beneficiaries and prescription drug coverage that would cover insulin and syringes.

ADA also maintained that competitive bidding would not undermine patient access to diabetic products and would largely affect industry.

Concerning other aspects of the bill, the conference report stipulates $600 mil. in new funds to lower the qualifying threshold for new technology "add-on" payments - a drop from the $1.5 bil. Congressional Budget Office score. AdvaMed believes the amount is adequate and would allow approximately two new technologies to qualify per year.

In addition, the conference agreement would institute a five-year freeze on laboratory payments. Although lab associations and diagnostic manufacturers oppose any freeze, they are pleased conferees chose to forgo the original co-pay provision or a seven-to-ten year freeze.

By contrast, diabetes and cardiovascular disease screening would be covered, and mammography payments would be increased, according to the conference agreement.

The conference report confirms provisions that were verbally agreed upon earlier this year. For example, the bill establishes statutory deadlines for CMS to complete and implement national coverage determinations.

Internal decisions will have a nine-month deadline, while decisions referred for external tech assessment or to the Medicare Coverage Advisory Committee will have a 12-month deadline (³ Also see "NCD Deadline Provisions In Rx Bill Gain Headway During August Recess" - Medtech Insight, 8 September, 2003., p. 9).

The bill also would cover routine costs for Category A experimental devices in clinical trials and establish a Council for Technology & Innovation at CMS to better coordinate coverage, coding and payment functions.

In addition, language was included that would improve the methods for determining new lab test payments by denoting a process for public notice and comment period for lab test reimbursement (⁴ Also see "Technology Council, IVD Provisions Get Go-Ahead By House/Senate Conferees" - Medtech Insight, 28 July, 2003., p. 9).

Disease management provisions incorporating monitoring technologies to better coordinate chronic care for Medicare beneficiaries also are part of the package.

A measure to take prostate brachytherapy out of the hospital OPPS and have CMS pay for the devices at charges adjusted to cost also is included (⁵ [A#01290270004], p. 5).

In a Nov. 19 letter to Senate Majority Leader Bill Frist (R-Tenn.), AdvaMed advocates support for the legislation - excluding competitive bidding provisions - contending that Medicare beneficiaries "may soon see an end to the long delays of 15 months to five years waiting for access to new, FDA-approved medical technologies."

Diabetes, Wheelchair Firms Brace For DME Impact As Rx Bill Goes To Floor

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