The resolve of House Republican leaders to avoid re-opening the controversial Medicare law with a technical corrections bill in 2004 will limit DME competitive bidding opponents' options in repealing the provision.

Republican staff members contend that a technical corrections bill is unwarranted since the majority of the Medicare Prescription Drug, Improvement & Modernization Act (DIMA) provisions will not be implemented until 2006.

Furthermore, the close working relationship between the Bush Administration and Hill staffers, which resulted in approximately 25 drafts of the legislation, makes a technical corrections bill unnecessary, staffers state. Ongoing lobbying efforts calling for a follow-up bill represent veiled attempts to introduce policy changes to the law, they add.

Although the GOP staffers maintain any Medicare legislation efforts in 2004 appear slim, the American Association for Homecare remains optimistic that a bill addressing DME concerns could be passed before the November elections.

The group is working with DME opponent Rep. David Hobson (R-Ohio) to repeal a provision that would adjust five products - including diabetes strips and lancets and powered wheelchairs - to reflect prices paid under the Federal Employees Health Benefits Plan (FEHBP) starting in 2005.

AdvaMed, meanwhile, is focusing on implementation efforts and plans to weigh in on the constitution of a competitive bidding program advisory and oversight committee, called for in the law.

"It's troublesome from our perspective that the government will have the ability to exclude certain products from the program and potentially dictate prices in a way they haven't before," AdvaMed Exec VP-Healthcare Systems & Federal Legislative Policy Carol Kelly commented.

"There's a tremendous potential here for overreaching of government authority, and we're going to be very mindful of the way in which the agency pursues competitive bidding for DME and hope to have manufacturers included on the advisory committee," she added.

While the cornerstones of AdvaMed's 2003 legislative policy were included in the Medicare law - representing a significant victory for the trade association - efforts to mitigate DME competitive bidding momentum repeatedly were stymied (¹ Also see "Device Industry Extols Medicare Passage Despite Competitive Bidding Thorn" - Medtech Insight, 1 December, 2003., p. 3).

DME competitive bidding opponents, mobilizing under the umbrella organization CAMSET - the Coalition for Access to Medical Services, Equipment & Technology - failed to entreat conferees to incorporate Senate language calling for a 10-year freeze on durable medical equipment into the final bill.

Efforts to include language allowing HHS to exempt services from competitive bidding, if access to technology were undermined, also fell short.

As the conference dragged on from July to November with few public agreements and no settled language on competitive bidding, stakeholders continually lobbied to recruit legislators to scuttle the $6.8 bil. cost-savings measure.

However, the long-awaited conference report contained an unanticipated and unwelcome surprise - language to adjust the payments of five specific services (hospital beds, oxygen, nebulizers, diabetes testing strips and lancets, and standard/powered-wheelchairs) to reflect prices paid under FEHBP (² Also see "Diabetes, Wheelchair Firms Brace For DME Impact As Rx Bill Goes To Floor" - Medtech Insight, 24 November, 2003., p. 15).

The provision was based on findings from a June 2002 Office of Inspector General report which concluded that Medicare pays more than other federal health programs for the majority of DME items reviewed. Industry contended that the report - and subsequent bill language - was based on faulty methodology.

With momentum for the bill soaring, DME opponents embarked on a last-ditch effort to alter the language to mitigate payment reductions for the five services.

Rep. Hobson, who represents Elyria, Ohio-based powered wheelchair manufacturer Invacare's district, unsuccessfully sought to add $1 bil. to the provision to eliminate the reduction caused by FEHBP pricing and pledged to vote against the legislation.

In the end, however, he was convinced to vote "yea" after gaining an assurance from Ways & Means Committee Chairman Bill Thomas (R-Calif.) that his concerns over competitive bidding could be addressed through follow-up legislation or structural changes. Despite Thomas' promises, such an opportunity now seems unlikely.

While stakeholders were unable to stop competitive bidding from becoming law, the device industry realized important gains with the bill's passage - most notably the new technology provision, which provides $600 mil. in new funding to lower the qualifying threshold for new tech add-on payments.

AdvaMed initially faced opposition from hospitals and legislators aiming to keep costs under the $400 bil. allotted for the entire bill. Ultimately, the trade group settled for a formula allowing one to two technologies to qualify each year instead of three to four (³ Also see "Medicare Reform Bills Head To Conference; Competitive Bidding Fuels Debate" - Medtech Insight, 30 June, 2003., p. 7).

The association also persevered in working with legislators to ensure that other provisions benefiting new technology were included, among them shorter timeframes for national coverage determination reviews and coverage of routine costs associated with Category A "experimental" device trials.

The lab industry also raised its lobbying profile in effectively opposing a 20% out-of-pocket lab co-pay provision in the Senate version of the bill and a verbal compromise agreement calling for a seven-to-10-year clinical lab fee schedule freeze. The industry eventually settled for a five-year freeze on lab test payments.

While national policy discussions on healthcare already are playing a major role in the 2004 election year, any legislation likely will be small, ad hoc bills, leaving industry to primarily focus its near-term efforts on monitoring and influencing Medicare implementation (see ⁴ Also see "United They Stand? Differing Device Platforms Share FDA Oversight Plank" - Medtech Insight, 29 December, 2003. ).

- Jaimie Kelley

Medicare Technical Corrections Legislation Doubtful After Rx Bill Passage

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