Call for Cap Delay Grows as Senators Write CMS

ATLANTA — A contingent of seven Republican senators on
Friday called on CMS Acting Administrator Kerry Weems to “revise
and, if necessary, delay” the Jan. 1 implementation of the 36-month
oxygen rental cap.

“Without meaningful changes to the rule, patient care will be
compromised and Medicare costs are likely to increase as the
frequency of emergency room visits increases,” said the Dec. 19
letter, signed by Sens. Pat Roberts, R-Kan.; Mike Crapo, R-Idaho;
Saxby Chambliss, R-Ga.; Arlen Specter, R-Pa.; George Voinovich,
R-Ohio; Christopher Bond, R-Mo.; and Johnny Isakson, R-Ga.

“Home oxygen providers are more than just suppliers of
equipment, they are also caregivers,” the letter added. “They
educate patients on the proper use of their equipment, answer
patients’ questions, make repairs and adjustments and ensure that
patients are receiving the correct amount of oxygen.

The Senate letter added volume to the clamor for delay of the
cap. As of Friday, 98 members of the House of Representatives had
signed onto a letter authored by Reps. Heath Shuler, D-N.C., and
Tom Price, R-Ga., seeking a delay. (See Letter to Delay
Oxygen Cap Gains Scores of Signatures, HomeCare
Monday, Dec. 15.)

Newspapers across the country have reported on the cap,
prompting nervous calls to CMS from beneficiaries questioning
future coverage for their oxygen therapy. CMS, anxious to do
damage control, last Monday assured beneficiaries through The
Associated Press that they wouldn’t lose access to their
oxygen benefits. CMS spokesman Laurence Wilson told AP
“the concerns are unfounded and stem in many cases from misleading
representatives from medical equipment companies, which are unhappy
with a change in federal law that kicks in Jan. 1.”

On Wednesday, CMS followed up with a Medicare consumer alert that attempted to
reassure beneficiaries they will “continue to get oxygen as long as
they need it.”

‘Unworkable’ Rules

Providers, industry organizations and legislators have all
expressed concern about the cap’s requirements and ambiguities, as
well as its ultimate effect on beneficiaries. While rental payments
are capped at 36 months, providers must continue service to
Medicare beneficiares for up to 60 months.

Regulations released Oct. 30 also mandate that providers are
responsible for arranging care for an oxygen patient who moves,
even if the move is across the country. As well, the new regs
stipulate that CMS will not reimburse providers for supplies, such
as masks, tubing or cannulas, between months 37 and 60, and will
pay for only two routine maintenance checks per year post-cap.

While such provisions are, in the words of several providers,
“unreasonable” and “ludicrous,” it is the numerous murky areas
within the cap rules that make providers even more anxious. In
recent teleconferences, CMS representatives have been peppered with
questions regarding the “reasonable useful lifetime” of equipment,
documentation requirements for new equipment and a raft of other
issues. The agency promised additional guidance would be coming
soon, but none had been issued as of press time Friday.

The uncertainty about the rule has made it impossible for
providers to come up with game plans, they said.

“You can’t prepare for it,” said Bill Desmarais, RRT, co-owner
of Home Care Specialists in Haverhill, Mass. “It’s
unworkable. CMS will drive up beneficiary out-of-pocket costs, and
providers simply will not take assignment after the cap is
reached.”

He said he is writing a letter to CMS and one of the questions
he is posing is whether the agency can cite one procedure code that
caps a medical service in the home, the hospital or elsewhere.

“Why don’t they cap a primary physician’s patient at 36 months
and tell them he has to take care of them for free for the next 24
months?” he asked rhetorically.

Bill Baker, president of RxO2 in Tucson, Ariz., said the rule’s
many ambiguities have stymied his planning for 2009.

“How can you possibly formulate a budget with no data?” he
wondered.

Baker said he knew he would take a “large budget hit” in January
and he tried to prepare for the change. “We tried to save money all
last year by not taking leases, not acquisitioning equipment. All
that resulted was a whopping tax bill from the government for not
spending money to create debt,” he said. “There is no win.”

Baker said he has no idea how much money he will lose with the
new rule. Desmarais, however, said he expects to lose nearly $1
million next year.

“We estimate about $80,000 a month, and we have a very small
percentage of Medicare beneficiaries,” he said, adding that he
doesn’t think providers with a high percentage of Medicare oxygen
patients are going to make it.

“Unless this goes away, they are going to be folding up,” he
said. “What plan does CMS have when small providers go out of
business due to the 36-month oxygen rental cap or choose not to
accept Medicare?”

Consultant Wallace Weeks of Weeks Group, Melbourne, Fla., said the cap’s
impact on providers is uncertain.

“The impact of the O2 rental cap may be different for each
provider,” he said. “One provider may have no patients who are on
service for 36 months and it therefore has no effect, while another
provider may have 40 percent of their patients on service for more
than 36 months. That provider, of course, will be seriously
impacted.

“My best guess is that, on average, the industry will lose about
13 percent of the O2 revenue because of the rental cap,” Weeks
said, “based on my best guess that Medicare experiences a length of
service of 42 months. There is no way I declare my estimate to be
perfect, but I am confident that it is reasonable.”

Whatever the percentage, many providers believe the impending
cut to be catastrophic enough to put their oxygen service, if not
their entire business, in jeopardy.

‘Second-Class Patients’

Desmarais, who has spent the last two weeks taking care of
hundreds of oxygen patients — many not his own who were
caught in the deadly New England ice storm and needed emergency
cylinders — said those days could well be gone if the cap is
enacted.

“Three hundred hours of overtime, hundreds of tanks for free
— there’s no way to recover that,” he said. But at least up
to now, that didn’t matter so much. “You take care of people,” he
said.

But the cap will change things.

“There are going to be a lot of changes to my beneficiaries and
to new patients,” Desmarais said. “What this is going to cost
Medicare beneficiaries as opposed [to private-pay beneficiaries] is
that they are going to be second-class patients. Their expected
level of service is going to change. They are going to have to
start paying for routine things out of pocket … I’m not
taking care of people for free.”

Desmarais said currently, his oxygen patients can pick up the
phone and ask questions of a registered nurse about their therapy
or condition. Respiratory therapists — he has eight on staff
— often go out to a patient’s home for free to help them with
a problem. All that will stop for Medicare beneficiaries, he
said.

“It’s gone,” he said.

For his part, Baker said he finds the whole cap rule
“absurd.”

“We never had a contract with [CMS],” he said. “And now, even if
I quit, they are gong to try and force me to pay for somebody I
never agreed to pay for by threat and intimidation … This is
a pure vindictive measure by Medicare upset that competitive
bidding got repealed.”

Baker said he believes the foundation of all the trouble is that
the payment schedules were set in place in the 1970s and ’80s and
reflect the work and equipment of that time period.

“The whole thing is, they haven’t got the prices right for the
product,” he said. “Now the technology has gotten better and they
are penalizing us, saying, ‘You’re getting paid too much because
the [newer] equipment works better.’”

If he sounds irate, it’s because he is. Baker’s company
specializes in oxygen, he said, and with the new cap, “my doubt is
whether I will be here in May.”

“I don’t know what to do,” he admitted. “I’m sitting here
waiting. Layoffs are imminent. I guess we’re ready to close.”

The irony of that: Under the new rule, even if he closes, Baker
will be responsible for furnishing oxygen to his Medicare patients
until the end of the lifetime of the equipment.