The president's FY 2008 budget proposal, submitted to Congress in early February, dramatically improves this industry's ability to have a constructive
by Cara C. Bachenheimer, Esq.

The president's FY 2008 budget proposal, submitted to Congress
in early February, dramatically improves this industry's ability to
have a constructive conversation with Congress regarding how
Medicare should pay for home oxygen therapy.

The proposed policy would limit payments for
“traditional” home oxygen equipment to 13 months, while
preserving payment at 36 months for what is generally described as
“new technology.” According to information from the
administration, that “new technology” includes in-home
oxygen transfilling systems as well as portable oxygen

The 2008 budget proposal has important implications for the HME
industry's lobbying strategy this year in Congress — as well
as for providers' businesses.

As an industry, it is important that we support the
administration's promotion of new technology while remaining
opposed to further payment cuts for home oxygen therapy that may
erode beneficiary access (i.e., a 13-month cap on traditional

But though far from perfect, the budget's oxygen proposal
illustrates that the administration and the Department of Health
and Human Services have an understanding of the cost and consumer
benefits of new home oxygen technology. As we discuss the issue of
appropriate Medicare payment for home oxygen with members of
Congress, however, we must have a complete and necessarily more
complicated conversation.

Note that a study issued in September by the Office of Inspector
General has produced an alarming and incorrect sound bite on
Capitol Hill that appears to support a 13-month payment cap. The
one sentence in that report that explains that the OIG looked only
at oxygen concentrator acquisition costs, and did not address at
all the costs of ambulatory/portable oxygen, has become lost.

The president's proposal of a new technology exemption provides
an excellent mechanism to facilitate policymakers' understanding of
how ambulatory oxygen is an underpaid — not over-reimbursed
— part of the entire oxygen equation.

In late January, Rep. Tom Price, R-Ga., reintroduced a bill that
would repeal the Deficit Reduction Act's current 36-month payment
cap and forced beneficiary ownership of oxygen equipment at 36
months. The Home Oxygen Patient Protection Act, H.R. 621, is
identical to last congressional session's H.R. 5513, which garnered
84 cosponsors.

This is an important platform for providers to use in
communicating with their congressional representatives. We must
educate lawmakers about the ill effects of requiring beneficiaries
to own their complex medical technology, and urge all congressmen
to sign on to H.R. 621.

In January, CMS' new oxygen payment rule, which also promotes
beneficiary access to new technology, went into effect. Between the
payment rule and the administration's proposed legislative
provision, these are clear signals that the government realizes the
advantages of new oxygen technology, and it will continue to move
reimbursement in that direction.

Another important component of the administration's 2008 budget
proposal for home oxygen is its silence on the equipment title
transfer enacted by the DRA. This is “Washington speak”
that sends a message to Congress that the administration does not
oppose reversal of the mandatory beneficiary ownership provision.
This is a huge positive for providers, since the president supports
providers' retention of oxygen equipment ownership.

The president's proposed budget is the starting point for
Congress and its annual budget process. Congress will next put
together its own proposed budget packages, some of which may follow
the administration's lead, some of which will not.

We have a significant opportunity with this new Congress to make
progress on moving toward an improved Medicare oxygen policy. The
mandatory title transfer policy is ripe for repeal, and H.R. 621 is
an excellent vehicle on which to base discussions with your
representatives and senators.

A specialist in health care legislation, regulations and
government relations, Cara C. Bachenheimer is vice president,
government relations, for Invacare Corp., Elyria, Ohio.
Bachenheimer previously worked at the law firm of Epstein, Becker
& Green in Washington, D.C., and at the American Association
for Homecare and the Health Industry Distributors Association. You
can reach her by phone at 440/329-6226 or by e-mail at