Repeal the cap? Reform the benefit? Yes and yes, oxygen stakeholders say.
by Susanne Hopkins

ATLANTA — Members of a newly formed oxygen coalition
sifted through provisions of several plans earlier this month
looking for common ground on reform of Medicare's oxygen benefit
and repeal of the 36-month rental cap.

"The big push now is to get a unified voice," said Mike
Calcaterra, Montana state chairman and legislative/DAC chair for
the Big Sky
Association for Medical Equipment Services
, which covers Idaho,
Montana and Wyoming.

Industry advocates were headed to Washington Feb. 11 for the
Association for Homecare
's lobby day, so, Calcaterra said, "we
need to make sure we are on message there with something that is
giving us immediate relief. We are already seeing providers closing
their doors."

AAHomecare convened the New Oxygen Coalition, or NOC, after a
number of state HME associations said they could not support the
plan unveiled in January
by AAHomecare and the Council for Quality
Respiratory Care
. Some state leaders said the plan lacks
specifics and does not immediately address the 36-month cap and the
post-cap payment rules, which took effect Jan. 1.

AAHomecare leaders fear, however, that Congress won't budge on
the cap before a reform plan is in place.

"While everyone would like to eliminate the 36-month cap or get
a better set of payment rules, both are difficult targets to
achieve in the current political environment," said Tyler Wilson,
president of AAHomecare. "Many within the oxygen community view the
likelihood of more cuts to oxygen as an imminent threat. The big
challenge right now is to develop a consensus plan that will
address both the immediate issues and the longer-term goal of

"All of us face real peril at the hands of Congress and CMS if
the oxygen provider community does not present at least a core of
common principles to address the issues."

Members of the new coalition — which includes several
state associations, VGM, The MED Group, CQRC, the National Association of
Independent Medical Equipment Suppliers
and AAHomecare —
all agree long-term reform is needed and the cap must be repealed,
but they are at odds over how those things can be accomplished.

"There are different versions of what reform might look like,"
said Teresa Tatum, executive director of the Georgia Association of
Medical Equipment Services
. "There is some agreement, but the
major disagreement is on the payment methodology."

Plans Galore

In addition to the AAHomecare/CQRC plan, two other reform plans
have been proposed by Jason Rogers, president of GAMES, and by Big
Sky AMES. "We think we have a vehicle that can give us an immediate
fix [to the rental cap]," said Calcaterra about the Big Sky plan.
"AAHomecare brought their proposal they worked on with CQRC —
and a lot of work, a lot of time went into that — but we
didn't see any immediate fixes in it.

"It's big-scale reform, and that's going to take a while. We are
worried about providers being there when the reform takes place. We
feel we have the plan for realignment on how they pay for the
service that would eliminate both the cap and competitive

The AAHomecare/CQRC plan, developed with the help of former CMS
Acting Administrator Leslie Norwalk, repeals the cap, changes the
status of oxygen entities from "suppliers" to "providers," exempts
oxygen from competitive bidding and would reimburse providers for
patient services, as well as equipment and supplies, in a bundled
payment. In addition, the plan is budget-neutral, a plus AAHomecare
points out considering the nation's current economic pressures (see
Unveils Oxygen Overhaul Plan
, HomeCare Monday, Jan.

But the overhaul plan includes a case-mix adjusted payment
system that bases reimbursement on patient ambulation, liter flow
and modality, a methodology some providers have said they are wary

According to Calcaterra, the Big Sky plan rearranges monies in
the benefit to reimburse more appropriately for service and
realigns payments so they aren't "front-loaded." Dubbed the "oxygen
flip plan" by some stakeholders, the plan "flips" priority of
payment dollars from stationary to portable.

Rogers said his "blended" plan "is an attempt to unite the
several plans put forward." It also provides for a possible
prospective payment system.

Sign-On Letter

Even as they grappled with how to move forward, stakeholders
were preparing to visit federal legislators to urge repeal of the
oxygen cap. They were armed with a sign-on letter
generated by Rep. Tom Price
, R-Ga., a physician who last year
introduced legislation to repeal the cap. According to the letter,
the Deficit Reduction Act, which mandated the rental cap, also
instructed CMS to establish adequate payments for oxygen.

"That's where we have the problem," said Tatum. "After 36
months, there aren't adequate payments."

Price asked his colleagues to appeal to CMS to address the issue
immediately — and to take further congressional action if
necessary. "Without immediate changes to the Medicare oxygen
policies, patient care will be compromised and Medicare costs will
increase," the letter read.

Said Tatum, "I feel like we are all going to come together
behind this letter."

Calcaterra is hopeful that the industry can reach agreement as
well on a long-term benefit plan. "We truly want to reform it, but
we are also trying to make Congress and CMS understand that there
is so much more to what we do than just [deliver] a piece of
equipment," Calcaterra said. "There is absolute disconnect between
the requirements to be a provider and the payment modality

"It is critical to get the industry behind whatever [the reform
plan] ends up looking like," he added. "We're already seeing
problems for beneficiaries being able to travel, relocate …
the bottom line is that the beneficiary is caught in the middle of

So are providers. "The cap is still the cap," lamented Bill
Baker, RRT, president of RxO2 in Tucson, Ariz., "and every month
[means] thousands of dollars lost. We still have to provide the
services at no fee … so the bleeding is still perfuse. The
members of this industry are hemorrhaging to death in red ink."

Long List of Issues

In addition to cap-related issues and benefit reform, HME
advocates were headed to Washington with a long list of issues to
put before members of Congress, among them: the revived competitive
bidding program; restoration of the 9.5 percent reimbursement cut
for complex rehab; the first-month purchase option; and
fraud-and-abuse initiatives.

Set to dovetail with AAHomecare's "Home Care on Capitol Hill"
lobby day, Rep. Heath Shuler, D-N.C., called a congressional
hearing to discuss
the effects of DMEPOS competitive bidding on small business
. At
a similar hearing last May, Shuler said it was unclear how under
the bidding program CMS would be able to deliver on its promise of
reducing costs, improving effectiveness and ensuring access to care
for seniors "without driving small health care providers out of
business and limiting access to care."

The National Coalition for Assistive and Rehab Technology
had also scheduled a call-in to support AAHomecare's lobby effort.
NCART asked its members to "help increase the decibel level of our
industry's message" by urging Congress to rescind the 9.5 percent
reimbursement reduction for Group 3 complex power wheelchairs.