Observation Deck:
'Not One Penny More!'
The industry simply cannot afford the offset amount in the CBO's H.R. 3790 re-score.
- By Wayne Stanfield
- Aug 20, 2010
The DME industry paid dearly, 9.5 percent or about $7.8 billion over 10 years to delay the “suicide” bidding program in 2009. That’s 25 percent more than the projected $5.8 billion savings from the program as scored by the CBO in 2002.
Earlier this year the CBO scored HR 3790, the bill to repeal the program, at a cost of $9.6 billion over 10 years. This score was based on the 2008 bids that set fees at 26 percent under Medicare.
Friday, the CBO rescored HR 3790 at $20 billion in savings, which means DME will have to offset this amount to end bidding before it goes into effect Jan. 1, 2011.
While Congress does not have to use this exact figure, it will have to offset the cost of making the bill budget neutral. Rarely is a lower number used.
When the May score came out, NAIMES used data provided by the CBO to calculate the $9.6 billion cost. The result was to give up 1.6 percent of the CPI increase each year for 10 years as an acceptable offset. The NAIMES Board at that time said “minus 1.6 percent CPI-U – and not a penny more.”
After the $20 billion score on Friday, the Board restated their position. The industry simply cannot afford to pay to offset this amount. To continue to offer more money to pay for ending this program sends the message that we are overpaid. Every time we reach into our pockets, Congress reaches into our pockets.
The low hanging fruit spoken of so often as the reason we keep getting tapped is gone; the tree is bare. We have paid until suppliers are closing in significant numbers. We have taken cuts in this industry for 20 years, including serious cuts in the past two years.
No one likes to draw lines in the sand, but this time it has to be done. According to most experts and DME leaders, Round 1 will collapse under the weight of problems. f that is the case, then the program will end itself without us paying.
Quoting Rich Mckeown, President and CEO of Leavitt Partners, and chief of staff for former HHS Secretary Michael Leavitt, “The train has left the station. I have no doubt that competitive bidding is here to stay. There will be some who will adapt and thrive in this new structure and some will just go away. Every time there is change there is opportunity.”
If we are to believe this prediction, offering to pay anything to stop competitive bidding will be fruitless. His crystal ball should be better than ours.
NAIMES will never quit fighting to end bidding, but we will fight in other ways without agreeing to pay more than we can afford.
About the Author
Wayne Stanfield, a former air traffic controller, has been in the DME industry for 20 years. He is currently president and CEO of the National Association of Independent Medical Equipment Suppliers (NAIMES), as well as the executive director of the Home Care Alliance of Virginia Inc. (HCAV), a provider network with 63 locations in 11 states. He can be reached at (434) 572-9457 or via e-mail at yourfuture@dmehelp.org.