Competitive Bidding – Oxygen Cap – PMD – SCHIP – Doc-Fix

ITS NOW OR NEVERJohn Gallagher

The VGM Group

21 February 2008

Before we begin…

A MOMENT OF SILENCEGO IRISH

2008 IS A New YEAR!

Four Horsemen of the ApocalypsePestilence – War – Famine & Death

With CMS We FACE # 5 NCB – Cap on O2 – Complex Rehab & Provider Elimination

THREATS TO THE DME INDUSTRYLong Term vs. Short Term

• National Competitive Bidding Answer = HR 1845 (Tanner / Hobson)

S. 1428 (Hatch / Conrad)• Oxygen Cap @ 36 months

Answer = HR 621 (Price) S. 1484 (Roberts)

• Medicare Reform Legislation (“DOC-FIX”)June 30 - 2008 w/ O2 cap @ 18 mon. & PMDAnswer = NO ADDITIONAL CUTS TO DMEContact your Congressman & Senator today!!

President Releases FY 2009 Budget: OXYGEN & Power Wheelchairs Targeted

On February 4, the President released his budget for Fiscal Year 2009. The legislative proposals for the Medicare program called for in the President’s budget would save

$12.2 billion in its first year and $178.0 billion over five years, far more than the President proposed in last year’s budget.

Once again, the President’s budget would eliminate the first month purchase option for power wheelchairs for a one year savings of $80 million and a five year savings of $720 million. In other DME, the budget proposal would reduce the rental period for

most oxygen equipment from 36 months to 13 months for a one year savings of $210 million and five year savings of $3.0 billion. The budget seeks $47.5 million to establish the administrative structure to support the DME competitive bidding program, which is

projected to yield savings totaling $5.3 billion over the next five years.

The budget is now referred to the Senate and House budget committees, where the committees will establish their own budget resolutions. Given the Democratic

majorities in both the House and the Senate, the President’s cuts to the Medicare programs are considered to be “dead on arrival”.

Medicare legislation of some fashion is expected before July 1, when a 10 percent reduction in payments to physicians under the Medicare program

kicks in.

Clinton and Obama Trade VictoriesN.Y. Senator Withstands Push By Surging Rival in Key Battlegrounds

McCain Dominates Big StatesHuckabee, Romney Stay Alive As They Score Wins in the South and West

Sen. Hillary Rodham Clinton won victories over Sen. Barack Obama in California, Massachusetts, New Jersey and New York last night, giving her presidential campaign a crucial boost. But Obama countered by winning of a string of states, including the general election battleground of Missouri, in the seesaw race for the Democratic nomination.

McCain easily captured New York, New Jersey and Connecticut, after being endorsed by former New York mayor Rudolph W. Giuliani, a defeated rival. McCain also won Missouri, Arizona, Illinois, Oklahoma and Delaware. His victory in California appeared to be by a large margin, though Romney will probably collect a sizable share of the state's delegates

because they are apportioned by congressional district. Washington Post 02/06

Develop Triple Track Approach to Combating: National Competitive Bidding –

Oxygen Cap – PMD Reimbursements -

Legislative – Develop a “champion” for the industry

Grass-Roots – Coordinate Grass-Roots activity at Provider Level – BECOME THE “PROVIDER LOBBYIST”

Legal – Develop legal effort to delay, impede and or defeat NCB

LCPC LEGAL ACTIONIN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS – DALLAS DIVISION

HEWITT v. LEAVITT

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO – EASTERN DIV.

SHINKLE, ZILLMAN & PREMIER MEDICAL SUPPLY v. LEAVITT

Surety Bonds

CMS Analysis;Added cost of Surety Bonds will result in reduction inthe number of DMEPOS suppliers

• In 2005 there were roughly 16,000 suppliers who billed the Medicare program less than $1,000

• In 2005 there were 13,000 suppliers who billed between $1,000 and $4,999.

• CMS predicts that as many as 30,000 suppliers currently enrolled in Medicare would stop serving Medicare beneficiaries – 22% would come from rural areas.

Senators Introduce Medicare Fraud Legislation

S. 2603 - Medicare Fraud Prevention Act of 2008

Late last week, Sen. Mel Martinez (R-Fla.) has introduced the Medicare Fraud Prevention Act of 2008, S. 2603. Five Senators joined Martinez in introducing the legislation: Sen. John Cornyn (R-Texas), Sen. Norm Coleman (R-Minn.), Sen. Lamar Alexandar (R-Tenn.), Sen. David Vitter (R-La.), and Sen. JimDeMint (R-S.C.). 

The bill would amend the Social Security Act “to provide increased civil and criminal penalties for actsinvolving fraud and abuse under the Medicare program and to increase the amount of the surety bond required for suppliers of durable medical equipment.” 

Specifically, the legislation would: • Double the civil fines for Medicare fraud and abuse. • Quadruple the maximum criminal fines for felony convictions from $25,000 to $100,000. • Double the maximum criminal fines for misdemeanor convictions. • Increase the maximum criminal sentence from five years to a ten-year maximum. • Increase the surety bond requirement for DME suppliers from the $50,000 (proposed by CMS in 1998) to $500,000.  

I discussed this with Dan Smith who is working on the bond for opur VGM Insurance office. He advises that our pricing will run between 2-4% of the surety bond depending on the size of the company and the company’s credit history. This would mean that the pricing would be between $10,000 and $20,000 for a $500,000 bond.

VGM meeting with Dr. Mark Pilley, MD

VIRGINIA Congressional Districts

Richmond, VA MSACongressional Districts 1, 3, 4, 5 & 7

* Rep. Jo Ann Davis (D-1st) Armed Services* Rep. Bobby Scott (D-3rd) Budget

Rep. Randy Forbes (R-4th) Armed Services*@ Rep. Virgil Goode (R-5th) Appropriations *@

Rep. Eric Cantor (R-7th) WAYS & MEANSOne Co-sponsor HR 1845 & Two Co-sponsor HR 621

Virginia CO-SPONSORSVirginia (3 out of 11 = 27%)

**Rep Jo Ann Davis (R-1st Dist) Armed Services – Co Sponsor HR 621**

DISTRICT OFFICE IN: Yorktown, Fredericksburg, Tappahanock

Virginia CO-SPONSORSVirginia (3 out of 11 = 27%)

Rep. Bobby Scott (D-3rd Dist) Education & WorkforceDISTRICT OFFICE IN: Newport News & Richmond

Virginia CO-SPONSORS Virginia (3 out of 11 = 27%)

Rep. Randy Forbes (R-4th Dist) ARMED SERVICESDISTRICT OFFICE IN: Chesapeake, Emporia, Colonial Heights

Virginia CO-SPONSORS Virginia (3 out of 11 = 27%)

**Rep. Virgil Goode (R-5th Dist) Appropriations - CO-Sponsor HR 1845 & HR 621**DISTRICT OFFICE IN: Charlottesville, Danville, Farmville, Rocky Mount

Virginia CO-SPONSORS Virginia (3 out of 11 = 27%)

Rep. Eric Cantor (R-7th Dist) WAYS & MEANS – Deputy Whip DISTRICT OFFICE IN: Glen Allen, Culpeper

VIRGINIA BEACH - NORFOLK MSACongressional Districts 1, 2, 3 & 4

* Rep. Jo Ann Davis (D-1st) Armed Services* Rep. Edward Schrock (R-2nd) SMALL BUSINESS

Rep. Bobby Scott (D-3rd) BudgetRep. Randy Forbes (R-4th) Armed Services

Rep. Walter Jones (R-3rd – NC) Armed ServicesZero Co-Sponsors HR 1845 & One Co-Sponsor HR 621

Virginia CO-SPONSORSVirginia (3 out of 11 = 27%)

**Rep Jo Ann Davis (R-1st Dist) Armed Services – Co Sponsor HR 621**

DISTRICT OFFICE IN: Yorktown, Fredericksburg, Tappahanock

Virginia CO-SPONSORSVirginia (3 out of 11 = 27%)

Rep. Thelma Drake (R-2nd Dist) Armed ServicesDISTRICT OFFICE IN: Virginia Beach, Accomac

Virginia CO-SPONSORSVirginia (3 out of 11 = 27%)

Rep. Bobby Scott (D-3rd Dist) Education & WorkforceDISTRICT OFFICE IN: Newport News & Richmond

Virginia CO-SPONSORS Virginia (3 out of 11 = 27%)

Rep. Randy Forbes (R-4th Dist) ARMED SERVICESDISTRICT OFFICE IN: Chesapeake, Emporia, Colonial Heights

KEY MEMBERS OF VIRGINIA CONGRESSIONAL DELEGATION

HOUSE:Rep. Jo Ann Davis @ (R-1st Dist) Armed Services Rep. Thelma Drake (R-2nd Dist) Armed Services Rep. Bobby Scott (D-3rd Dist) BUDGET Rep. Randy Forbes (R-4th Dist) Armed Services Rep. Virgil Goode *@ (R-5th Dist) Appropriations *@ Rep. Bob Goodlatte * (R-6th Dist) Agriculture – RMember* Rep. Eric Cantor (R-7th Dist) WAYS & MEANS Rep. James Moran (D-8th Dist) Appropriations Rep. Rick Boucher *@ (D-9th Dist) Energy & Comm *@ Rep. Frank Wolf * (R-10th Dist) Appropriations * Rep. Thomas Davis (R-11th Dist) Gov Reform – Ranking Member

* = HR 1845 (4)

@ = HR 621 (3)

VIRGINIA SENATORS

• SENATOR JOHN WARNER (R) 5th Term – Armed Services

Retiring

• SENATOR JIM WEBB (D)1st Term – Armed Services, Veteran Affairs

IT’S NOW OR NEVER TO GET INVOLVEDDO WE CHOOSE TO FIGHT?

TANNER – HOBSONHR 1845 - 110th Congress

• Medicare must conduct an impact analysis on beneficiary access to quality products/services after first round (10 MSAs)- And -Would prohibit HHS from applying NCB to the rest of MSAs (e.g. next 70) or applying comp bid rates to non-MSAs unless specifically authorized by Congress. 

• Applicable to all providers – including large ones this time (SBA > $6 Million Revenue)...BUT…the provider must still submit a bid…just must be under current Medicare allowable and then will be paid the “winning” bid price.  – still must bid, not an automatic “any one in good standing can play” --

The Bills also include provisions that:

• Would restore judicial or administrative review of a number off CMS decisions related to competitive bidding.

• Would require the quality standards to be in place before competitive bidding is implemented..

• Would exempt small rural (populations under 500,000) MSAs.

• Would exempt items and services unless a 10% savings could be demonstrated..

• Would subject the Program Advisory and Oversight Committee (PAOC) to the Federal Advisory Committee Act which requires public access to meetings and proceedings.

Senators Hatch and Conrad Introduce Bill, S. 1428, to Address

Competitive Bidding Problems

Homecare providers and stakeholders should ask their U.S. Senators to cosponsor a bill introduced yesterday by Senators Orin Hatch (R-Utah) and Kent Conrad (D-N.D.). Their legislation, S. 1428, would address some of the most onerous problems with the competitive bidding program that is beginning in Medicare for home medical equipment.

• Their bill is the same as the legislation they jointly introduced in the 109th Congress, which was a companion to last year’s Hobson-Tanner measure. S. 1428 would:

• Exempt smaller, rural areas (metropolitan statistical areas with populations under 500,000);

• Allow small providers that do not receive a contract to continue to provide home medical equipment in Medicare at the competitive bid rate;

• Restore the rights of participating providers to administrative and judicial review;

• Exempt items and services unless savings of at least 10 percent can be demonstrated.

SEC. 3. SMALL SUPPLIER PROTECTIONS.(a) Qualified Supplier Participation- Section 1847(b) of the Social Security Act (42 U.S.C. 1395w-3(b)) is amended--

(1) in paragraph (4)(A), by striking `The Secretary may limit' and inserting `Subject to paragraph (6)(D), the Secretary

may limit'; and(2) in paragraph (6)(D), by adding at the end the following: `Such appropriate steps shall include permitting suppliers that are classified as small businesses under the Small

Business Act to continue to participate as suppliers at the single payment amount so long as they submit bids at less than the fee schedule amount otherwise applicable to the items and they otherwise comply with applicable program

requirements.'.

Georgia Congressman Tom Price, M.D Reintroduces O2 Legislation - H.R. 621:

Home Oxygen Patient Protection Act

• "To amend part B of title XVIII of the Social Security Act to restore the Medicare treatment of ownership of oxygen equipment to that in effect before enactment of the Deficit Reduction Act of 2005."

• In the 109th Congress, the list of co-sponsors to H.R. 5513 grew to 84

H.R. 621 would repeal:

(1) the limitation of Medicare payment to the supplier for such equipment (including portable oxygen equipment) to 36 months of continuous use; and

(2) the requirement that the equipment supplier transfer title to the individual at the end of such period, with payments continuing at specified monthly rates.

Lobby effort is working

BUT IS THERE BURN OUT?

WAYS & MEANS COMMITTEECHARLES B. RANGEL (NY) - Chairman

ENERGY & COMMERCE COMMITTEEJohn D. Dingell (MI), Chairman

Ratio:  31-26

ACTION STEPS NEEDED

TODAY

• ACTION STEPS NEEDED by each state/regional medical equipment association and by HME providers (regardless of CBA area or location).

VGM HOST GRASSLEY FUNDRAISER

• Raised $70,000

• 50 + in attendance

Next –

Fundraiser for

Chairman Baucus (D-MT)

24 March 2008 Helena, MT

The plan was and is built around these LCPC activities:

• It is conducting a public information campaign in selected congressional districts through a multi-media effort designed to educate the electorate about their legislators’ support of selective contracting for HME. LCPC wants Medicare beneficiaries to understand how their freedom to choose providers and equipment are adversely affected by selective contracting. 

• LCPC filed a federal lawsuit seeking to strike the selective contracting sections within the MMA on constitutional and other grounds. The lawsuit will include Medicare beneficiary patients who are suggested by local providers in areas selected for the first bidding and who volunteer to assist in this cause. 

• LCPC will partner with other organizations likely to be the next targets of selective contracting and those beneficiary groups likely to be adversely affected if the scheme is implemented. 

• LCPC is conducting an increased informational campaign for members of Congress to explain why selective contracting is bad public policy because it will create a two-tier health-care system in the U.S

Educate Members of Congress & Beneficiaries About

1. Impact of MMA & NCB2. The 36 month DRA oxygen cap (& potential 13 month reduction)

http://www.lastchanceforpatients.org

THREATS TO THE DME INDUSTRY

• National Competitive Bidding Answer = HR 1845 (Tanner / Hobson)

S. 1428 (Hatch / Conrad)• Oxygen Cap @ 36 months

Answer = HR 621 (Price) S. 1484 (Roberts)

• Medicare Reform Legislation (“DOC-FIX”)June 30, 2008 w/ O2 cap @ 18 mon. & PMDAnswer = NO ADDITIONAL CUTS TO DMEContact your Congressman & Senator today!!

202.224.3121