[Congressional Record Volume 153, Number 82 (Thursday, May 17, 2007)]
[Senate]
[Pages S6308-S6309]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself and Mr. Conrad):
  S. 1428. 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, I am pleased to join Senators Conrad and 
Roberts in introducing the Medicare Durable Medical Equipment Access 
Act of 2007.
  Some background on why this bill is necessary might be useful.
  Among the provisions of the Medicare Modernization Act, MMA, was a 
provision that instituted a bidding process for durable medical 
equipment. It was a good concept--we have all seen the advantages to 
Medicare beneficiaries and to the Federal Government of competitive 
bidding in Medicare Part D. The government and beneficiaries are paying 
lower prices for prescription drugs as a result of fair competition.
  At the time of the passage of the MMA, it was known that Medicare was 
overpaying substantially for certain durable medical equipment. The MMA 
instituted a bidding process for durable medical equipment in order to 
bring market discipline to the purchasing process. It also directed the 
Secretary of Health and Human Services, HHS, to establish badly needed 
quality standards for Medicare's suppliers of durable medical equipment 
and related services.
  The purpose of S. 1428, the Medicare Durable Equipment Access Act, is 
to correct problems arising from provisions in the MMA that apply to 
rural areas and urban areas of low population density. The bill seeks 
to protect the access of Medicare beneficiaries in these areas to 
homecare equipment and services. It also will allow small businesses to 
participate in the program, but only if they meet the quality standards 
established in this legislation and can meet the competitively bid 
price.
  The bill protects Medicare beneficiaries in three ways.
  First, the MMA permits the HHS Secretary to exempt from the bidding 
process rural areas and areas with low population density that are not 
competitive unless there is a significant national market through mail 
order for a particular item or service. The law also permits suppliers 
in rural areas to be exempted from the program's quality standards. 
Medicare patients must be assured that they are dealing with qualified 
suppliers and our bill assures them that they will be.
  Second, the MMA allows the Secretary of HHS to exempt rural areas and 
sparsely populated urban areas from the bidding process if they lack 
health care infrastructure, a vague and subjective judgment. This bill 
defines areas eligible for exemption as metropolitan service areas with 
fewer than 500,000 people.
  Finally, the MMA established a Program Advisory and Oversight 
Committee to advise the Secretary on implementation of the program. The 
MMA exempted the Program Advisory and Oversight Committee from The 
Federal Advisory Committee Act, FACA. FACA was enacted by Congress in 
1972. Its purpose is to ensure that committees that advise the 
executive branch be accessible to the public and objective in their 
judgments. This bill places this program under FACA.
  This legislation also provides important protection to small 
businesses. The MMA provides that there shall be no administrative or 
judicial review for businesses participating in competitive bidding. 
Our bill provides for judicial appeal rights, giving legal recourse to 
businesses that participate in the competitive bidding process.
  The MMA also directs the HHS Secretary to take appropriate steps to 
ensure that small suppliers have an opportunity to participate. Our 
bill specifies that such appropriate steps shall include permitting 
suppliers that are classified as small businesses under the Small 
Business Act to continue to participate at the single payment amount, 
so long as they submit bids at less than the fee schedule amount.
  In addition, the MMA permits the HHS Secretary to use competitive 
acquisition bid rates from one region to determine payment rates in 
another noncompetitive acquisition area. Our bill requires the HHS 
Secretary to complete a comparability analysis to ensure that payments 
in non-competitive areas are fair. It requires the Secretary to publish 
the analysis in the Federal Register.
  Finally, the purpose of the competitive bidding process is to save 
the Medicare program and its beneficiaries' money from the purchase of 
durable medical equipment, but a new bureaucracy must be created to 
implement the program. Our bill requires the HHS Secretary to exempt 
from competitive acquisition requirements any items and services not 
likely to result in savings of at least 10 percent.
  Twenty-five small suppliers of durable medical equipment in Utah have 
banded together to support this legislation and I believe they speak 
for hundreds of small suppliers around the United States. They support 
the establishment of quality standards for all suppliers of durable 
medical equipment to Medicare. They are willing to price their products 
competitively. They are used to providing personal services to their 
customers in small Utah towns. Their customers are also their 
neighbors. They all fear that their businesses, which are built on 
personal service, may be sacrificed to large suppliers from distant 
cities who cannot educate Medicare beneficiaries. A flyer in the mail 
may not be enough to teach a disabled diabetic how to use a walker.

[[Page S6309]]

  I urge my colleagues to support this legislation which permits the 
potential savings from competitive bidding, mandates quality standards 
for all of Medicare's durable medical equipment suppliers, and protects 
small businesses and Medicare beneficiaries in rural areas and in low 
density urban areas.
  Mr. CONRAD. Mr. President, today I am pleased to join my colleague, 
Senator Hatch, in reintroducing the Medicare Durable Medical Equipment, 
DME, Access Act. This bill will help protect rural DME providers from 
the negative consequences of competitive bidding and ensure that 
seniors have access to the highest quality of DME supplies. It will 
also help to rid the system of fraudulent suppliers who are filing 
improper and illegal claims.
  As many of my colleagues know, the Medicare Modernization Act, MMA, 
required Medicare to replace the current DME payment methodology for 
certain items with a competitive acquisition process, which is 
currently underway. In fact, the first round of bids are due on July 
13. Our bill would address several issues that could negatively impact 
the ability of rural suppliers to compete and ensure that seniors are 
getting high-quality products.
  Specifically, our bill would strengthen language in the MMA that 
allows the Secretary to exempt rural areas by requiring the Secretary 
to exempt metropolitan statistical areas with fewer than 500,000 
people. In addition, the legislation would require that the Centers for 
Medicare and Medicaid Services, CMS, include the attainment of quality 
standards as a factor in computing the winning bid to ensure that 
patients receive both high-quality and low-cost equipment. Third, the 
Medicare Durable Medical Equipment Access Act would allow small 
businesses to continue providing DME in Medicare at the acquisition bid 
rate, even if the businesses didn't have the winning bid. Finally, the 
bill 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.
  Many argue that there is fraudulent activity in the Medicare DME 
benefit and that is why competitive bidding is necessary. I agree that 
it is far too easy to obtain a supplier number and start filing 
improper and illegal claims. That is why I applaud the efforts of CMS 
and others who are cracking down on the inappropriate behavior. 
However, it is also imperative that we ensure sufficient access to 
quality DME care in the program and protect those suppliers who are 
acting appropriately. I believe this bill achieves the appropriate 
balance between these two goals. I urge all of my colleagues to support 
this important legislation.
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