Lawmakers press witnesses on DME reimbursement, liquid oxygen access and risks of AI‑driven denial models
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Summary
Members questioned witnesses about competitive bidding’s effects on DME suppliers, the SOAR Act’s proposal to remove liquid oxygen from bidding, and bills to ban the WISER pilot’s AI‑driven denial incentives after witnesses warned of supplier exits and risky vendor incentives.
Tom Ryan, president and CEO of the American Association for Home Care, told the subcommittee that competitive bidding has driven down durable medical equipment reimbursement and that suppliers—especially small businesses in rural and non‑bid areas—have faced drastic revenue losses, layoffs and market exits.
"When those rates came into effect ... 65% of companies reduced the amount or type of products they offered, 46% reduced their service areas, 53% laid off staff and over 1 in 10 said they may be out of business within a year," Ryan said, summarizing industry survey results that members cited during questioning.
Ryan and other witnesses described HR 2005 (DIMES/DME relief) as a targeted, temporary payment adjustment to stabilize supplier markets and preserve access. Members also focused on HR 2902, the Supplemental Oxygen Access Reform (SOAR) Act, which would exempt supplemental oxygen from competitive bidding, set a separate reimbursement methodology for liquid oxygen and create a national electronic template to support medical‑necessity reviews and program integrity.
Representative Evans and others highlighted the clinical need for liquid oxygen in a subset of patients; witnesses said 1 cubic foot of liquid oxygen expands to about 860 cubic feet of gaseous oxygen, and that liquid oxygen use has declined by roughly 80% because current reimbursement does not cover supplier costs. The SOAR Act’s proponents argued that separating liquid oxygen from competitive bidding and establishing a workable payment methodology would restore access and preserve respiratory therapist services.
Separately, several members raised concerns about the WISER pilot and private vendors using AI to perform prior‑authorization reviews with payment tied to savings from denials. David Lipschutz and other witnesses described the financial incentives in WISER as perverse and urged prohibitions on models that compensate vendors based on reduced approvals; Representative Lansman’s bill (HR 6361) was discussed as a legislative response to prohibit such models in traditional Medicare.
Committee members sought additional data and asked witnesses to answer written follow‑ups; the subcommittee took no immediate votes.
