Congress cuts coverage for erection devices

January 12, 2015

Just over a year ago, the Office of Inspector General of the Department of Health and Human Services issued a report declaring that Medicare payments for vacuum erection systems were “grossly excessive” and recommended steps to remedy the situation.

Bob GattyWashington-Just over a year ago, the Office of Inspector General (OIG) of the Department of Health and Human Services issued a report declaring that Medicare payments for vacuum erection systems (VES) were “grossly excessive” and recommended steps to remedy the situation.

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Specifically, the OIG said the Centers for Medicare & Medicaid Services should establish a special payment limit or seek legislative authority to include VES in the Medicare Competitive Bidding Program and then implement a National Mail-Order Competitive Bidding Program for the systems as well.

OIG: $14.4 million savings lost

The OIG said if Medicare had paid the same rates for VES as non-Medicare payers, the federal government would have saved an average of $14.4 million for each of the 6 years reviewed in its investigation, and Medicare beneficiaries would have saved about $3.6 million annually.

While the OIG said it could not calculate precise cost savings that would be achieved through the Competitive Bidding Program, it noted that CMS had announced that its latest round of competitive bidding will reduce prices by 45% for certain types of durable medical equipment, prosthetics, orthotics, and supplies and by 72% for mail-order diabetic testing supplies nationwide. 

CMS concurred with the recommendations.

Nearly a year after the Dec. 30, 2013 date of that report, Congress-yes, the dysfunctional, highly partisan U.S. Congress-gave final approval to H.R. 647, the Achieving a Better Life Experience (ABLE) Act, which establishes a program for disabled individuals to obtain tax-exempt accounts so they can pay for qualified disability expenses.

The ABLE Act, passed with bipartisan support by that rancor-filled Congress that couldn’t do much of anything else except bicker, helps the families of disabled individuals save for health care costs, housing, lifelong education, and other needs. Under current law, a child diagnosed with a disability cannot have assets worth more than $2,000 or earn more than $680 per month without forfeiting Medicaid eligibility. Through the ABLE Act, tax-free savings accounts up to $100,000 can be set up to pay for disability-related expenses.

Given the political situation in Congress, how did this bill, which is expected to cost $2 billion over 10 years, get passed?

“The bill appeals to Democrats because we are protecting benefits and entitlement programs for people with disabilities, and it appeals to Republicans because this is a private-sector solution to a public-sector problem,” said Sara Hart Weir, interim president of the National Down Syndrome Society, which led the effort to build support.

What’s not to like about finding a solution to help the disabled pay for health care expenses? What does that have to do with the controversy over VES payments?

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Well, to help pay for it, the bill includes several offsets that will affect urologists, including accelerating by 1 year the timeline for reviewing potentially “misvalued” codes and eliminating Medicare coverage for VES entirely.

The AUA points out that relative value targets for misvalued services was an idea first introduced in the “doc fix” patch bill enacted by Congress last March, which required CMS to meet annual targets for revising misvalued services amounting to 0.5% of total fee schedule spending through the years 2017-2020.

If payment redistribution fell short of the 0.5% target in any of those years, CMS was instructed to implement across-the-board cuts equal to the shortfall amount. The AUA and other physician groups objected, arguing that the provision essentially would allow the Health and Human Services secretary to bypass the Relative Value Scale Update Committee and determine reimbursements for physician services in the future.

Since the OIG’s report, lawmakers were under pressure to level the payment field for VES devices, but rather than including them in the Competitive Bidding Program, as the OIG suggested, Congress used the ABLE bill to end Medicare Part D coverage for VES. The Congressional Budget Office estimates this will save $444 million over the next 10 years, a nice chunk of the expected $2 billion cost of the ABLE program.

AUA, other groups step up education

Last year, the AUA led passage of a resolution at the American Medical Association House of Delegates interim meeting that reiterates access to coverage for the full range of erectile dysfunction treatments is an important subject that must be addressed. The AUA says it has been working with other men’s health groups on Capitol Hill to educate lawmakers on the importance of these devices and their impact on the quality of life of Medicare beneficiaries.

Now, however, a new, conservative Congress is in power with many new members in both Houses, so those “educational” efforts will need to be intensified and expanded-especially since the ABLE bill, with its provision wiping out Medicare payments for VES, has already been passed.

“We are very disappointed that, rather than attempt to implement a competitive bidding process for these devices, Congress has chosen to eliminate coverage for them completely,” said AUA Public Policy Council Chair David F. Penson, MD, MPH. “This runs contradictory to the views of the entire House of Medicine, which recognizes erectile dysfunction and promotes access to the full continuum of therapies for couples struggling with this issue.”

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