FOR IMMEDIATE RELEASE
OCTOBER 13, 1999CONTACT: Linda Ruckel (202) 434-7243
Bahar Morid (202) 434-7273
HIMA CALLS ON HCFA TO WITHDRAW LATEST
"INHERENT REASONABLENESS" CUTSWASHINGTON, D.C. - The Health Industry Manufacturers Association (HIMA) called upon the Health Care Financing Administration (HCFA) to withdraw its latest round of proposed cuts in Medicare payments for home health equipment. These proposed cuts should be withdrawn because they are not supported by the letter or intent of the law and because they could threaten the quality of patient care. HIMA expressed this view in comments filed with the Health Care Financing Administration in response to the agency's proposal to reduce Medicare payment for six types of home health equipment.
"We are troubled when implementation of such mechanisms is inconsistent with the letter and intent of the law and when implementation threatens both patient access to, and continued innovation and research in, medical technology," said Pam Bailey, president of HIMA in the comment letter. "Patient access-whether defined as access of today's patients to current products, or access of future Medicare patients to innovations still in the R&D pipeline-must always be the primary concern of all Medicare payment programs. It must also be the measure against which virtually every policy change is judged."
HCFA claimed that the cuts it proposed on August 13, 1999-which would amount to almost 15 percent per year and would be phased-in over several years-were justified on the basis that the existing rates were not "inherently reasonable." In its response, however, HIMA said that HCFA's evaluation did not provide a sound and unbiased basis on which to conclude that proposed reductions were justified. "The agency did not conduct a survey of representative prices and did not make use of available marketplace information," wrote Bailey. "Stated more colloquially, HCFA did not look at real-world, marketplace prices in any way or in any form in arriving at its conclusions." HIMA stressed that the agency's use of prices paid for technologies by the Department of Veterans Affairs as a proxy for wholesale prices in the marketplace was artificial and inappropriately narrow.
Bailey also asked the agency to withdraw its proposal for two other reasons:
- HCFA's notice of its intent to make the payment reductions violated the due process protections required for adjustments of the size proposed by HCFA.
- HCFA proposed to launch the cuts despite the fact that key issues raised by a 1998 proposal to make similar reductions in payment rates for six other types of equipment are still under review by the General Accounting Office.
Bailey also expressed a broader concern over the impact of such cuts, not just on the products included in the proposal, but also potentially on other types of medical devices used widely by patients. "We are doubly concerned because we believe that these proposals represent only a beginning for HCFA," said Bailey in the letter. "The agency indicates it is working from a list of 100 technologies ranked by medical expenditures. If it proceeds to make use of this cost-cutting tool without following the procedures set forth by Congress and without grounding this cost-cutting tool on a firm methodological foundation, the impact could be devastating for patient access, as well as for continued device innovation."
### The Health Industry Manufacturers Association (HIMA) is a Washington, D.C.-based trade association and the largest medical technology association in the world. HIMA represents more than 800 manufacturers of medical devices, diagnostic products, and medical information systems. HIMA's members manufacture nearly 90 percent of the $62 billion of health care technology products purchased annually in the United States, and more than 50 percent of the $147 billion purchased annually around the world.