Can Fred Upton Walk and Chew Gum at the Same Time?

Brian McNicoll
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Posted: Nov 04, 2016 12:01 AM
Can Fred Upton Walk and Chew Gum at the Same Time?

It’s not getting a lot of attention, but when the dust clears after the election, our current Congress will go back to work. And there’s no telling what kind of sausage will get made with President Obama and several members of Congress down to their last chance to build their legacies.

Rep. Fred Upton, R-Mich., is not leaving Congress, but he will lose his position as chairman of the House Committee on Energy and Congress after December because of the party’s self-imposed term limits for congressional committee chairmen.

Upton doesn’t want to leave the chairmanship until he pushes through the 21st Century Cures Act, which would speed up the approval process for drugs and medical devices and increase funding to the National Institutes of Health and the FDA.

With limited time and a lot of legislation to work through, leaders in the homecare industry have become concerned Upton will spend his time and energy on his legislative baby and leave legislation they support to restore some funding for Medicare reimbursements for the next Congress.

“While he is not opposed to the Medicare reimbursement fix, Upton doesn’t want any other legislation to interfere with his committee’s focus on 21st Century Cures,” wrote Shawn McCoy in a story for Inside Sources.  “Without Upton’s support, it is unlikely legislation will move until the next Congress.”

Upton should prove he can build his legacy and pass legislation to address problems with the home health system at the same time. The problem is acute, and the results of not addressing it could be catastrophic.

What’s at stake is how much money providers of home healthcare and equipment receive for performing various services, such as home ambulatory care, physical therapy, etc., for patients with Medicare. Last year, Congress and the Centers for Medicare and Medicaid Services, which administers the program, instituted a competitive bidding process to drive down costs for home healthcare services.

Because of the costs in money and time to deliver these services, home healthcare is one area where prices are lower in cities than elsewhere. But CMS measured the costs of operating in densely populated areas, then applied those costs to those in rural areas. As a result, rural providers have endured two decreases this year in the amount they get from Medicare for their services – one in January and the other in July – and now receive less than half, in some cases, what they received in 2015.

These are not giant firms that can simply shift costs to elsewhere on the balance sheet and continue to provide these services. This is a $90 billion industry with 1.9 million employees. There is no dominant player in the market, and more than half the 418,000 businesses employ fewer than five people. Losing half their reimbursements mean they go into the red and either look for a new line of business – which leaves their patients in the lurch – or cut services and expenses.

Tim VanAntwerp, owner of Van’s Medical in Lakeland, Mich., told McCoy the second round of cuts put his firm in the red and that he doesn’t know how long he can go on losing money on it.

“One of the ways I can stop bleeding is to stop accepting Medicare or by drastically changing the way I’m doing the Medicare business,” VanAntwerp told McCoy. “For me, it’s a dilemma because I want to serve the population” without compromising on the reputation for quality his family has built over the generations in this business. 

VanAntwerp lives in Upton’s district, has known him for 30 years and even was honored by the congressman on the 100th anniversary of Van’s Medical last year. But he hears Upton is the main roadblock to the legislation that would fix this problem, and he thinks he knows why.

“He thinks our industry is full of fraud and abuse, and so he hasn’t been one of our supporters,” VanAntwerp told McCoy.

Upton could solve this with relative ease. Both houses of Congress passed legislation earlier this year to roll back the second set of cuts and give policymakers time to assess the damage to patients in rural areas and seek a better way. The Senate attempted to rush through the House version in September to beat the long congressional break for the elections but was unable to get a bill to the president’s desk.

The legislation enjoyed bipartisan support in both houses and could be brought forth and dealt with in relatively short order.

And it needs to be. Bringing medical services to rural areas is an enduring challenge for our vast country. It’s either keep the providers from going broke or find new providers, which never has proven easy.

Streamlining the drug approval process will enhance the legacy of Upton as committee chair. But keeping small businesses that serve hard-to-reach sick or disabled people on board … that’s a pretty nice legacy too.