Providers Face Oxygen Rental Cap in Budget Bill

WASHINGTON–The HME industry is still reeling over a provision
tacked onto the federal budget bill at the last minute that would
cap Medicare oxygen equipment rentals at 36 months.

Under the new provision, monthly payments for home oxygen
rentals would stop after 36 months, and the equipment title would
then be transferred to the beneficiary. For portable oxygen, the
supplier would continue to receive the monthly portable add-on fee
after 36 months.

“To me, this is the biggest thing that’s ever happened. And I’ve
been in this business 30 years,” said Randy Wolfe, president and
CEO of Lambert’s Health Care, Knoxville, Tenn.

Before the holiday recess, both the House and Senate had passed
budget versions that included the provision, but a final
reconciliation vote in the House is still pending after minor
changes were made by the Senate. In the meantime, industry leaders
have been contacting legislators in an effort to educate them on
the issue.

The subject was even raised on Jerry Springer’s radio show last
Thursday during discussion of a topic titled “Budget Cuts On Our
Backs.” Josh Sorrell, a Cynthiana, Ky.-based provider who called in
to the show, said that Springer brought up the oxygen cuts as an
example.

In a live interview broadcast during the show, “I made a point
[that the government will be] shifting the burden to patients. By
not having us maintain equipment, they’re probably going to incur
more costs rather than save money,” said Sorrell, owner of Sorrell
Home Medical. “We get calls in the middle of the night and, a lot
of time, it’s for something really small. If we were not there to
help them, these patients would probably end up in the emergency
room.”

Because providers service and maintain equipment as part of the
rental fee, patients also could be put in danger if they are made
responsible for equipment upkeep, stakeholders said.

“These are some pretty horrendous provisions [in the budget
bill] that came in at the last minute without any prior notice,”
said Cara Bachenheimer, vice president of government relations for
Elyria, Ohio-based Invacare Corp. “They raise all sorts of patient
care issues. It’s such a scary provision because when ownership
transfers, the provider doesn’t have an ongoing responsibility.
It’s a life-sustaining prescription device, and this provision
leaves the beneficiary without a lifeline.”

For example, in the event of an emergency such as a power
failure or hurricane, providers will have extra tanks delivered,
she said. But with this provision, “there’s no financial foundation
for that to occur,” Bachenheimer continued. “How are
[beneficiaries] going to obtain those services if Medicare is not
going to pay for it?”

Wolfe said that after selling–versus renting–several oxygen
concentrators to patients, he has seen firsthand the complications
that can arise.

“In every single case that it happened, it was nothing but
problems for these patients and families for the entire time that
they owned their machine. It just does not work,” he explained. “We
don’t even sell [concentrators] to nursing homes because they can’t
maintain them. They get them clogged up, don’t know they’re not
working, and then when they finally get around to calling, [the
concentrators are] putting out 40 percent oxygen and are almost
beyond recovery.”

Under the provision, parts and labor for maintenance and service
for oxygen and other capped rental equipment would be paid, as
determined by the HHS secretary, when not under a manufacturer’s
warranty.

If the budget bill is approved, the oxygen capped rental
provision would take effect as of Jan. 1, 2006. For existing
rentals, the 36-month count would begin Jan. 1.

But Rita Hostak, vice president of government relations for
Longmont, Colo.-based Sunrise Medical, doesn’t think the provision
will take effect without serious consideration. “There are a lot of
questions that will have to be addressed through regulation in
order to implement this potential legislation,” she said. “Once
people begin discussing implementation issues, it will become very
apparent that there are very serious implications regarding safety
and efficacy that will impact beneficiaries.”

Prior to the news, providers had already been concerned with a
general capped rental provision in the bill, which would limit
rental payments for most DME–including manual wheelchairs,
hospital beds, nebulizers and CPAPs–to 13 months. Power
wheelchairs are excluded from the provision, however, and current
law gives beneficiaries the option to purchase them at the time of
issue.

The oxygen provision was inserted into the budget bill by Rep.
Bill Thomas, R-Calif., on Sunday, Dec. 18–only a day before it was
approved by the House. The original provision called for capping
rental payments at the 18th month, but the blow was softened when
Ohio legislators threatened to derail the entire budget bill
because of the provision, Bachenheimer said.

“Some of our allies [in Congress] were dumbfounded. The best
they could do was extend the provision to 36 months,” she said.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said
that Medicare currently pays about $200 a month for each oxygen
rental, and called the provision “a good first step” toward a
better payment system.

But Bachenheimer contends that while Thomas’ original provision
boasted savings of $2 billion, that was lost when the time frame
for the cap was extended to 36 months. “In theory there’s no real
savings,” she said. “It’s such a senseless provision. I can’t
imagine anyone had any understanding of the impact of this.”

The most recent version of the federal budget bill is awaiting
reapproval by the House, which is expected to reconvene late this
month.

To view the text of the budget bill, also known as S. 1932,
visit http://thomas.loc.gov.

For sample letters to Congress and other tips for taking action,
visit www.aahomecare.org or
www.vgm.com.