On Sunday, March 21^st, the House of Representatives passed the Health Care Reform Bill.  The bill was then sent to the Senate, back to the House again, then ultimately back to the Senate where it was passed on Thursday, March 25th.  As you’ve seen, just about everyone has an opinion on this bill and emotions are high on all sides of the debate.  There are provisions in the bill that will affect the home medical equipment industry and will directly impact power mobility providers like ourselves.  We also believe that it is important for you to know that Fuller Rehabilitation will use every means available to preserve the integrity and viability of the home medical equipment industry. 

The following summary gives a rundown of the items in the bill that affect the home medical equipment industry.

Sec. 3136.  Elimination of the Purchase Option for Standard Power Wheelchairs Covered by Medicare

Traditionally, nearly all power wheelchairs have been provided on a purchase basis.  The supplier bills Medicare for a delivered item, and Medicare pays a lump sum amount; usually within 30 days.  In the health care reform bill, the purchase option is eliminated on standard power wheelchairs.  The equipment must be rented on a 13 month basis. After 13 months, the equipment is owned by the patient.  By spreading payments over 13 months, suppliers will experience a cash shortfall with a resulting financial strain on the industry. 

This provision is to be implemented January 1, 2011.  Standard power chairs delivered to a Medicare beneficiary on or after this date will be billed as 13-month capped rental item.

The purchase option for complex rehabilitative power wheelchairs will remain intact.

Items subject to competitive bidding contracts entered into prior to January 1, 2011 are to be excluded from this provision.  Competitive bidding contract suppliers will retain the first month purchase option throughout the duration of the contract which runs for three years.

This provision would have the effect of eliminating  suppliers who can not afford the cash shortfall created by the 13 month rental program.  Fewer suppliers will mean that the Medicare beneficiary will have reduced access to needed medical equipment.   Fuller Rehabilitation is committed to continuing the fight to preserve the purchase option.   We have the support of several key members of the Senate, and we, along with other industry stakeholders, are confident that we will  find a solution.

Sec. 9009.  Imposition of excise tax on medical device manufacturers and importers. 

This provision imposes an excise tax on manufacturers, producers, or importers of any taxable medical device.  Device manufacturers will pay this tax on any sales transactions taking place on or after January 1, 2013.  It is inevitable that some or all of this tax will be passed along to the provider. 

Fuller Rehabilitation will support the manufacturers in eliminating the excise tax on manufactured and imported durable medical equipment.  This tax could have an adverse impact upon the financial health of DME manufacturers.  These manufacturers are essential to our business, and it is important that our manufacturing partners are financially sound.  

Sec. 6410.  Adjustments to the Medicare durable medical equipment, prosthetics, orthotics, and supplies competitive bidding program.

This section expands the number of areas to be included in round two of the competitive bidding program from 79 of the largest metropolitan statistical areas to 100 of the largest MSAs.  This provision would also allow competitive bid prices to be applied to all areas by 2016.

Fuller Rehabilitation has been involved in educating members of congress of the problems inherent in the Medicare competitive bidding program.  This provision would accelerate the program.   We will continue our task of getting the competitive bidding program repealed.

Sec. 6411. Expansion of the Recovery Audit Contractor (RAC) program.  Requires States to establish contracts with one or more Recovery Audit Contractors (RACs).

RAC contractors are used by the Medicare program to identify and recover overpayments made to suppliers.  These contractors are compensated, in part based upon the amount of overpayments collected.  This provision would expand the program to include services provided under State Medicaid plans as well as State plan waivers. 

This section requires that States enter into contracts with Recovery Audit Contractors by the completion of 2010. 

We believe that the vast majority of Medicare and Medicaid fraud in the durable medical equipment industry is committed by bogus dealers who enter the business with intent to commit fraud.  Medicare and Medicaid programs have the responsibility of issuing supplier numbers to legitimate companies.  Unfortunately, they have not been successful in screening out the bad apples.  The addition of the RAC contractors is popular mainly with those who do not understand the nature of Medicare fraud.  We believe that these contractors can be potentially disruptive to good upstanding companies as they sort through patient files looking for technical and clerical errors that would allow denial of claims.  We are working with the industry to educate members of Congress and the media on the nature of Medicare fraud and we are offering viable remedies to the fraud issue.  

Sec. 6405.  Physicians who order items or services required to be Medicare enrolled physicians or eligible professionals.

This section requires durable medical equipment (DME) or home health services to be ordered by a Medicare eligible professional or physician enrolled in the Medicare program.  This provision is to be enacted July 1, 2010. 

This appears to be early enforcement of the PECOS regulation.  This issue is yet to be clarified.

Sec. 6407.  Face-to-face encounter with patient required before physicians may certify eligibility for home health services or durable medical equipment under Medicare.

We are already operating under the FTF rule on power mobility devices.  This provision would require a FTF on all durable medical equipment under the Medicare program.