[Congressional Record Volume 152, Number 119 (Thursday, September 21, 2006)]
[Senate]
[Pages S9899-S9900]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself and Mr. Conrad):
  S. 3920. A bill to amend part B of title XVIII of the Social Security 
Act to assure access to durable medical equipment under the Medicare 
Program; to the Committee on Finance.
  Mr. HATCH. Mr. President, today I am pleased to introduce the 
Medicare Durable Medical Equipment Access Act with my colleague Senator 
Kent Conrad of North Dakota. This bill makes several modest changes to 
the competitive acquisition process for this equipment.
  In 2007, a competitive acquisition program will replace the current 
reimbursement policy for durable medical equipment in Medicare. This 
shift toward a market-based approach to payments for durable medical 
equipment was mandated through the Medicare Modernization Act (MMA) of 
2003.
  Our bill was written with two key goals in mind. The Medicare Durable 
Medical Equipment Access Act would preserve access to home medical 
equipment in rural areas for older or disabled Americans who need this 
equipment. In addition, the bill will allow small businesses that 
provide homecare equipment to continue to participate in the Medicare 
Program if they qualify and meet the competitively bid price.
  Our legislation is identical to H.R. 3559 which was introduced 
earlier this Congress by Congressmen David Hobson and John Tanner. That 
bill has broad, bipartisan support and 132 House cosponsors.
  As background, section 302(b)(I) of the MMA requires Medicare to 
replace the current durable medical equipment payment methodology for 
certain items with a competitive acquisition process beginning in 2007 
in 10 of the largest metropolitan statistical areas (MSAs).
  The Medicare Durable Medical Equipment Access Act would require 
several modest changes to the competitive acquisition program.
  First, the MMA requires the Secretary to include quality standards in 
the competitive acquisition process and also allows the Secretary to 
waive the application of quality standards if applying the standards 
would delay implementation of the process. However, quality standards 
are essential to ensuring that beneficiaries are not forced to use the 
lowest-cost provider without consideration of the quality of the 
medical equipment items provided. This bill would require the Secretary 
to include quality standards before implementing competitive 
acquisition.
  Second, the MMA allows the Secretary to exempt rural areas and urban 
areas with low population density to ensure that competitive 
acquisition is not implemented in areas that lack the health care 
infrastructure to support it. This bill would require the Secretary to 
exempt MSAs with fewer than 500,000 people.
  Third, the MMA created a Program Advisory and Oversight Committee 
composed of stakeholders to advise the Secretary on the implementation 
of competitive acquisition. However, the MMA does not apply the Federal 
Advisory Committee Act (FACA) to it. The purpose of FACA is to ensure 
that advice rendered to the executive branch by advisory committees be 
both objective and accessible to the public. This bill would apply FACA 
to this oversight committee.
  Fourth, the MMA allows the Secretary to contract with only as many 
providers as the Secretary deems necessary to meet the demand of an 
area. Any provider not awarded a contract would be prohibited from 
participating in Medicare for up to 3 years. This bill would allow 
applicable small businesses that did not receive a contract to continue 
to provide durable medical equipment in Medicare at the competitive 
acquisition bid rate.
  Fifth, the MMA explicitly prohibited administrative or judicial 
review for competitive acquisition of DME. This means that providers do 
not have legal recourse to appeal the bid amount or contracts. My bill 
would restore appeal rights for competitive acquisition of DME. These 
rights exist elsewhere in the Medicare program.
  Sixth, under the MMA, the Secretary can only competitively acquire an 
item if the Secretary believes that doing so would result in 
significant savings to Medicare. It is important for the Secretary to 
show that the savings from competitive acquisition justify constructing 
a bureaucracy to implement the program. To that end, this bill would 
require the Secretary to show that competitive acquisition would result 
in savings of at least 10 percent.
  Finally, under the MMA, the Secretary can use competitive acquisition 
bid rates in one MSA to set the reimbursement for another MSA. Our bill 
would require that, before doing so, the Secretary conduct a 
comparability analysis of the two MSAs. This will help prevent any 
applications of bid rates outside of an MSA that are inappropriate.

[[Page S9900]]

  The new, market-based competitive acquisition program in Medicare is 
designed to save money and make Medicare more efficient. In order to 
achieve this goal, we need to preserve access to care and preserve the 
cost-effective health care infrastructure that homecare represents. 
This bill will help ensure that the market reforms enacted by the MMA 
accomplish both cost savings and continued access to cost-effective 
care.
  Before I close, I would like to give a real life example from my home 
state of Utah on why this legislation is needed and necessary. A small 
provider of durable medical equipment in Utah approached me about how 
current law will impact him. This company was established in 1997 with 
just one employee. It has grown over the years by providing its 
customers the products that they need to stay at home and out of the 
hospitals.
  When competitive bidding hits the State of Utah in 2007, this small 
company will be forced to bid against large national companies. Much 
larger companies compete with the smaller ones to provide medical 
equipment such as wheelchairs, in home hospital beds, and home oxygen. 
If my Utah company loses the bid, it will go out of business, as will 
many of its smaller competitors in Utah. This company prides itself on 
being able to provide customers with a high quality of service. The 
owner of the company has asked me how he can continue to provide great 
service when his company has been forced to bid to the lowest price 
possible just to keep from going out of business.
  Therefore, this legislation means a lot to small companies not just 
in Utah, but all over the country, by allowing them to continue to 
provide medical equipment to those who need it.
  I heard from several small medical equipment companies in my home 
State of Utah for several years on this issue and they made very 
convincing arguments. That is why I am introducing the Medicare Durable 
Medical Equipment Access Act. I strongly urge my colleagues to talk to 
their constituents back home who own small durable medical equipment 
companies. I am certain that these companies are experiencing concerns 
similar to those shared with me.
  I urge my colleagues to cosponsor this legislation so that Medicare 
beneficiaries will continue to receive quality care at affordable 
prices for their medical supplies.
  Mr. CONRAD. Mr. President, today I am pleased to join my colleague, 
Senator Hatch, in introducing the Medicare Durable Medical Equipment 
(DME) Access Act. This bill responds to the concerns I heard from 
seniors and suppliers in North Dakota about the negative impact 
competitive bidding could have on the ability of DME suppliers in rural 
States to remain viable. The bill we introduce today is designed to 
preserve access to DME in rural areas.
  The Medicare Modernization Act (MMA) required Medicare to replace the 
current DME payment methodology for certain items with a competitive 
acquisition process beginning in 2007 in 10 of the largest metropolitan 
statistical areas (MSAs). The Medicare Durable Medical Equipment Access 
Act would require several modest changes to the competitive acquisition 
program to help preserve access to medical equipment in rural areas.
  First, our bill would build upon language in the MMA that allows the 
Secretary to exempt rural areas to prevent these beneficiaries from 
losing access to needed medical equipment. Specifically, it would 
require the Secretary to exempt MSAs with fewer than 500,000 people.
  Second, the MMA allows the Secretary to waive the application of 
quality standards in the competitive acquisition process if applying 
the standards would delay implementation. Our bill would ensure that 
quality standards are included when determining the winning bid to 
ensure that patients receive both high-quality and low-cost equipment.
  Third, in creating the competitive acquisition program, the Secretary 
may contract with only as many providers as deemed necessary to meet 
demand in an area. Any provider not awarded a contract would be 
prohibited from participating in Medicare for up to three years. This 
bill would allow certain small businesses to continue providing DME in 
Medicare at the competitive acquisition bid rate, allowing them to 
offer in-person care to Medicare beneficiaries.
  Fourth, under the MMA, the Secretary can use competitive acquisition 
bid rates in one MSA to set the reimbursement for another MSA. Our bill 
would require that the Secretary compare the two to ensure that the bid 
rates aren't inappropriately applied.
  Finally, the Medicare Durable Medical Equipment Access Act would take 
additional steps to ensure that competitive acquisition results in 
savings, that providers have access to administrative and judicial 
review, and that any meetings of the newly created CMS Program Advisory 
and Oversight Committee on competitive bidding be open to the public.
  These provisions are small steps, but they will ensure that 
beneficiaries in rural areas have access to the medical equipment they 
need. While we should pursue options for making the Medicare program 
more efficient, we must also protect access to care. I believe this 
bill achieves the appropriate balance between these two goals. I urge 
all of my colleagues to support this important legislation.
                                 ______