Mark J. Higley New England Medical Equipment Dealers Association December 7, 2006

1. Mark J. Higley New England Medical Equipment Dealers Association December 7, 2006

2. You’ve probably seen this slide before…but again, the HME industry needs to emphasize that…

3. Homecare is the most cost-effective setting for healthcare…a fact that is amply documented in medical literature. • Moreover, homecare spending represents a very modest proportion of the total Medicare budget. The previous chart attached shows that home medical equipment expenditures and home health expenditures in Medicare over the past decade represent small fractions of the Medicare budget. • Demand for homecare has increased along with the medical needs of a growing population of older Americans. But spending for homecare is clearly not the problem with Medicare. In fact, it's part of the solution.

4. VGM “Fraud & Abuse” Initiative • Result of conversations with Senate Finance Committee • Email sent to 5,300 provider locations • Hard copies sent to 1,800 provider physical addresses • Hard copies faxed to all members of Congress and certain other appropriate officials

5. Homecare’s key issues include… • CMS 1270- P; the May 1 proposed rule re the competitive bidding program for DMEPOS • Section 6109 of the Deficit Reduction Act; eliminating the Medicare beneficiary’s choice of continuing to rent oxygen equipment in the capped rental category, followed by… • CMS 1304 – F; The final rule that revamps oxygen classification system by splitting stationary & portable oxygen contents into two separate payment classes, and calls for a third payment class for new technologies, such as portable concentrators and home transfilling systems.

6. And most recently… • The October 2, 2006, CMS announcement of the reduced reimbursement levels for power wheelchairs that was effective on November 15, 2006. • The original proposed fee schedule called for substantial cuts in rehab reimbursement, which would significantly limit access to the medically appropriate power mobility device (PMD) for the disabled community. • However, as a result of continued discussions with manufacturers, suppliers, and clinicians, a decision has been made to further revise the PMD policy.

7. Other Items We Will Review… • An economist report summarizing cost and savings issues associated with competitive bidding

8. We will also review important these regulatory issues, including… • The final supplier quality standards--which HME providers must meet not only to participate in competitive bidding but also to do any Part B business. • CMS 1540-F; the August 1 final rule that establishes requirements for accreditation of DMEPOS suppliers and lays the groundwork for timely implementation of NCB. • The Accrediting organizations selection, of which the selection of “deemed status” entities has now occurred. • NPI Concerns

9. “Lame Duck” Session Issues: • Congress returned on December 4, & is now considering add-ons to Medicare Physician Payment Legislation totaling $20B. This may be considered along with unrelated extensions for certain tax breaks. • Lawmakers continue to work toward an agreement on cuts in the Lame-Duck Session. • Our concern: Is there potential for further reducing O2 reimbursement (13 mo.) due to an estimated $6.5 billion savings?

10. “Doc Fix” • Medicare physician reimbursements will decrease by 5.1% in January 2007 without congressional action during the lame-duck session, which likely will end this week • Frist: 4 different proposals under consideration, including a doubling of the reduction in 2008 to cover the cost • Also: Lawmakers "are weighing a lengthy list of possible add-ons to the Medicare physician payments legislation," such as provisions that involve nursing homes, physical therapists, medical device companies, rural health care facilities and kidney dialysis providers.

11. The provisions have "a collective price tag approaching $20 billion, and there appear to be few available offsets that do not spark strenuous objections from health care interests" or the Bush administration • Other potential funding reductions under consideration include a freeze on Medicare reimbursements to payments for hospice and home health providers

12. As the 109th Congress comes to an end and the industry heads toward a pivotal year, it’s time to make yourself known and lay the groundwork for the 110th Congress. • It is time to mobilize your local home care community—providers, manufacturer representatives, patients, and families.

13. HME INDUSTRY WINS ONE • BUT IT WAS ONLY A “Skirmish” NOT THE WAR • CHAIRMAN GRASSLEY PULLS CONSIDERATION OF CAP 13 on OXYGEN FOR “DOC FIX” AFTER GRASSROOTS EFFORT • HOW DO WE BUILD ON THIS WIN?

14. The Future We Don’t Know (WRITTEN BEFORE THE ELECTION)….Democrats "plan to undo the Medicare drug program" if they win a majority of one or both chambers of Congress, Robert Goldberg, vice president for strategic initiatives at the Center for Medicine in the Public Interest, writes in a Washington Times opinion piece. According to Goldberg, House Minority Leader Nancy Pelosi (D-Calif.) recently "promised that if Democrats took control of Congress, her party would eliminate the choice of private-sector plans in favor of a single govern- ment purchaser for seniors' medications & medical equipment" Such a Program would reduce costs“ only by drastically limiting the choice of Medicines that doctors and seniors now have,“ adding that the Department of Veterans Affairs (VA) drug plan "offers 30% fewer drugs than the average Medicare plan.“ ..“the Democrats will again push for a nationalized healthcare plan similar to the “Hillary Plan” of the early 1990’s.” (National Journal, 10/17)

15. Members of Congress do want to hear from their constituents—that is, anyone who lives in the state (for Senators) or the specific Congressional District they are from (for House members). Links on VGM allow you to punch in a zip code and receive a link to your corresponding senator or House member.

16. FACTS: In any given year, only a small percentage of constituents contact their members of Congress. Fewer than 3% of constituents contact their member of Congress about legislative issues. Fewer than 2% of constituents are active in political campaigns. • That means that, as a constituent, your calls, e-mails, and meetings make a big difference—especially if you underscore the role your organization plays in the community with your number of employees and the number of home care patients you represent.  

17. In some cases, a few calls from just one well-connected, politically active home care provider can produce huge results in getting a member to cosponsor or even introduce legislation. • We have seen that happen several times this year already on the Home Oxygen Patient Protection Act. We encourage all NEMED providers to become a well-connected activist.  

18. NEXT CHAIRMAN OF WAYS & MEANS COMMITTEE… • Rep. Charlie Rangel (D-NY) (Incoming Chairman) • Rep. Jim McCrery (R-LA) (Ranking Member)

19. NEXT CHAIRMAN OF Energy & Commerce Committee • Rep. Joe Barton (R-TX) (outgoing Chairman – New Ranking Member) • Rep. John Dingell (D-MI) (New Chairman)

20. NEXT CHAIRMAN OF Senate Finance Committee… • Sen. Charles Grassley (R-IA) (Former Chairman – New Ranking Member) • Sen. Max Baucus (D-MT) (New Chairman)

21. A minimum of about 400 e-mails or letters and 500 phone calls are required to get a Congressional office to modify or reconsider its position on an issue. If every home care provider in a given Congressional district contacts his member of Congress, it may not be enough to push our issues to the top of the heap. • Knowing this makes it all the more essential to make sure that home care providers recognize their role as leaders who can bring more stakeholders into the picture. One of the stakeholder groups you can bring in is employees. The drivers, therapists, and others who work for your organization can champion home care issues if they are in the loop about them and are encouraged to contact Congress.  

22. Mobilizing patients to contact Congress can be an effective means of advocating for stronger home care policy in Washington. • Ask the member of Congress to perform a specific action. For instance, to fix competitive bidding, ask members to sign on to the Hobson-Tanner bill (HR 3559 in the 109th; re-introduction is very likely). For the oxygen issue, ask members of the House cosponsor the Home Oxygen Patient Protection Act (HR 5513) and Senators to cosponsor S 3814 (re-introduction of each also likely).  

23. Be prepared, professional, polite, and patient. Time is tight.  Get to the point quickly, be brief, and summarize—always summarize.   • Congressional staff members have more issues and details to cover than they can manage. Reinforce the issue as much as possible with one-page leave-behinds. • Talking points & summaries are available from VGM & AAHomecare.

24. Requests during the lame duck session: • Don’t consider adding the capping of oxygen reimbursement at 13 months to any appropriations bills • Add language to an HHS appropriations bill to strike the DRA’s provision for capped rental oxygen at 36 months • PMD implementation delay to get all the miscalculations and errors fixed before a final implementation date of January 1, 2007

25. NEMED Provider Call To Action... • After the lame duck session and the 110th Congress is in…emphasize to your elected officials the importance of co-sponsoring and supporting the (reintroduced) H.R. 3559 and S.3920, and also the Home Oxygen Patient Protection bills (H.R. 5513 and S. 3814.)

26. Rep. Hobson: HR 3559 On July 28, 2005, Congressmen David Hobson (R-OH) and John Tanner (D-TN) introduced The Medicare Durable Medical Equipment Access Act of 2005. This bill would remedy many of the “competitive acquisition” provisions of the Medicare Modernization Act of 2003 (MMA). In remarks at AAHomecare’s Congressional reception in June, Congressman Hobson said he had vetted HR 3559 through the Ways and Means Committee (Chairman Bill Thomas) with no major objections. “ANY WILLING QUALIFIED PROVIDER” Note: There were 149 Co-Sponsors to HR 3559 in the 109TH Congress!

27. Hobson – Tanner Recap H.R. 3559 would amend the MMA to protect patient access to homecare and allow qualified small providers to participate in the bidding program. The bill would:- Exempt smaller, rural (populations under 500,000) MSAs; - Allow all qualified providers that are small businesses and that submitted a bid below the current allowable to participate at the selected award price; - Restore the right of providers participating in the program to administrative and judicial review;

28. Hobson – Tanner Recap - Exempt items and services unless savings of at least 10 % can be demonstrated, compared to the fee schedule in effect January 1, 2005; - Protect beneficiary access to care by requiring CMS to conduct a comparability analysis for areas that are not competitively bid to ensure the rate is appropriate to costs and does not reduce access to care; - Subject the PAOC to the Federal Advisory Committee Act (FACA), which requires public access to meetings and proceedings.

29. S. 3920 IN THE SENATE OF THE UNITED STATES September 21, 2006 Mr. HATCH (for himself and Mr. CONRAD) introduced the following bill; which was read twice and referred to the Committee on Finance To amend part B of title XVIII of the Social Security Act to assure access to durable medical equipment under the Medicare Program. Note: There were 2 Co-Sponsors to S. 3920 in the 109TH Congress

30. HR. 5513 • H.R.5513 -- Title: 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. Sponsor: Rep Schwarz, John J.H. "Joe" [MI-7] (introduced 5/25/2006)      Cosponsors (74) Latest Major Action: Referred to House subcommittee. Status: Referred to the Subcommittee on Health. Note: Rep. Schwarz was defeated in the primary. However Rep. Tom Price (R-GA), a physician, has indicated he will reintroduce the bill

31. S. 3814 • S.3814Title: A bill 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. Sponsor: Sen Roberts, Pat [KS] (introduced 8/3/2006)      Cosponsors (6) Latest Major Action: 8/3/2006 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance. Note: Senator Roberts has indicated he will reintroduce the bill

32. HR 4994 H.R.4994 Title: To amend title XVIII of the Social Security Act to exempt complex rehabilitation products and assistive technology products from the Medicare competitive acquisition program. Sponsor: Rep Lewis, Ron [KY-2] (introduced 3/16/2006)      Cosponsors (7) Latest Major Action: 3/16/2006 Referred to House committee. Status: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means

33. Hatch is committed to reintroduce Senate bill Alpine Home Medical Equipment, Peterson Medical receive "promise to study the issue" from Utah Senator during “MEET & GREET” Local providers of home medical equipment set aside their competitive interests Tuesday and joined forces to lobby for help in stopping legislation deemed detrimental to the industry from taking effect early next year. Business owners and their patients met with Sen. Orrin Hatch, R-Utah, to encourage him to sponsor a bill that would prevent competitive bidding for home medical equipment, particularly oxygen, from becoming part of the Medicare program absent demonstrated cost savings and other quality control measures. A similar bill is making its way through the House of Representatives.

34. Tell a story by putting a human face on the issue. Try to know the member’s position beforehand so you can be prepared. A face-to-face meeting with the member of Congress or staff is the most effective means of getting your point across. The meeting can take place in Washington in the member’s Capitol Hill office, in the district office back in the state, or during a visit to your site or facility. • Examples follow…

35. Mercy Assisted Care meets with Rep. Paul Ryan (R-WI/Ways & Means) and demonstrated oxygen concentrator functions and maintenance

36. PENNSYLVANIA MEMBERS MEET WITH REP. TIMOTHY MURPHY, a physician who thought “DME suppliers just deliver…”

37. MICHIGAN PROVIDER HAS “IN- HOME MEET & GREET” WITH SENATOR DEBBIE STABENOW...

38. VIRGINIA HME PROVIDER SAM CLAY HAS IN-STORE MEET & GREET” WITH REP. RANDY FORBES (who reviewed beneficiary paperwork burden)

39. GAMES – GEORGIA MILITIA MEETS WITH REP. PHIL GINGREY (R-GA)

40. CONNECTICUT CO-SPONSORS – HR 3559 Connecticut (3 out of 5 = 66%) Rep John Larson (D-1st Dist) Ways & Means Rep Robert Simmons (R-2nd Dist) DEFEATED IN NOV Rep Rose deLauro (D-3rd Dist) Budget Rep. Christopher Shays (R-4th Dist) Rep. Nancy Johnson (R-5th Dist) Ways & Means DEFEATED IN NOV

41. NEW CONN MEMBERS Rep.-Elect Joe Courtney (D—Conn.) Replaced Rep. Robert Simmons 2nd District Residence: VernonBorn: April 6, 1953; Hartford, Conn.Religion: Roman CatholicFamily: Wife, Audrey Budarz Courtney; two childrenEducation: Tufts U., B.A. 1975 (history); U. of Connecticut, J.D. 1978Military Service: NoneCareer: Lawyer; public defenderPolitical Highlights: Conn. House, 1987-1995; Democratic nominee for lieutenant governor, 1998; Democratic nominee for U.S. House, 2002 • Joe Courtney comes to Congress with an extensive background in health care issues, but he realizes that freshmen sometimes have limited opportunities to exploit their strengths. • Courtney was a leader on health issues while serving in the state legislature.

42. NEW CONN MEMBERS Rep.-Elect Christopher S. Murphy (D—Conn.) Replaced Rep. Nancy Johnson 5th DistrictResidence: CheshireBorn: August 3, 1973; White Plains, N.Y.Religion: ProtestantFamily: Engaged to Cathy HolahanEducation: Williams College, B.A. 1996 (history & political science); U. of Connecticut, J.D. 2002Military Service: NoneCareer: Lawyer; state legislative and campaign aidePolitical Highlights: Southington Planning and Zoning Commission, 1997-99; Conn. House, 1999-03; Conn. Senate, 2003-present

43. MASSACHUSETTS CO-SPONSORS Massachusetts (8 out of 10 = 80%) Rep John Olver (D-1st Dist) Rep. Richard Neal (D-2nd Dist) Ways & Means Rep. James McGovern (D-3rd Dist) Rep. Barney Frank (D-4th Dist) Rep. Marty Meehan (D-5th Dist) Rep. John Tierney (D-6th Dist) Rep. Edward Markey (D-7th Dist) Energy & Commerce Rep. Michael Capuano (D-8th Dist) Rep. Stephen Lynch (D-9th Dist) Rep. William Delahunt (D-10th Dist)

44. MAINE CO-SPONSORS MAINE (2 out of 2 = 100%) Rep Thomas Allen (D-1st Dist) ENERGY & COMMERCE Rep. Michael Michaud (D-2nd)

45. NEW HAMPSHIRE CO-SPONSORS New Hampshire CO-SPONSORS (1 out of 2 = 50%) Rep Jeb Bradley (R-1st Dist) BUDGET DEFEATED IN NOV Rep. Charles Bass (R-2nd Dist) Energy & Commerce DEFEATED IN NOV

46. NEW - NEW HAMPSHIRE MEMBERS Rep.-Elect Paul W. Hodes (D-N.H.) Replaced Rep. Charlie Bass 2nd DistrictResidence: ConcordBorn: March 21, 1951; Manhattan, N.Y.Religion: JewishFamily: Wife, Peggo Horstmann Hodes; two childrenEducation: Dartmouth College, A.B. 1972 (French & drama); Boston College, J.D. 1978Military Service: NoneCareer: Lawyer; musician; state prosecutorPolitical Highlights: Democratic nominee for U.S. House, 2004 • Paul W. Hodes says a career in law and public service, complemented by his passion for the arts, should bode well for him in what could be a hostile 110th Congress. • Hodes is interested in serving on the Energy and Commerce and the Judiciary committees.

47. NEW - NEW HAMPSHIRE MEMBERS Rep.-Elect Carol Shea-Porter (D—N.H.) Replaced Rep. Jeb Bradley 1st DistrictResidence: RochesterBorn: December 1952; New York, N.Y.Religion: Roman CatholicFamily: Husband, Gene; two childrenEducation: U. of New Hampshire, B.A. 1975 (social services), M.P.A. 1979Military Service: NoneCareer: Community college instructor; social workerPolitical Highlights: No previous office Prognosis: Very Liberal

48. Rhode Island CO-SPONSORS (2 out of 2 = 100%) Rep Patrick Kennedy (D- 1st Dist) Rep. James Langevin (D-2nd Dist) Senator Lincoln Chafee (R-RI)DEFEATED IN NOV

49. NEW SENATOR IN RI Sen.-Elect Sheldon Whitehouse (D—R.I.) Replaced Senator Lincoln Chafee Residence: ProvidenceBorn: October 20, 1955; Manhattan, N.Y.Religion: EpiscopalianFamily: Wife, Sandra Whitehouse; two childrenEducation: Yale U., B.A. 1978 (architecture); U. of Virginia, J.D. 1982Military Service: NoneCareer: Lawyer; gubernatorial aidePolitical Highlights: R.I. Department of Business Regulation director, 1992-94; U.S. attorney, 1994-98; R.I. attorney general, 1999-2003; sought Democratic nomination for governor, 2002

50. VERMONT CO-SPONSORS (1 out of 1 = 100%) Rep. Bernard Sanders (I – At Large) WON SENATE RACE Senator James Jeffords (R-VT) Retired