New Oxygen Guidance, Finally

BALTIMORE — CMS issued additional guidance on oxygen billing Jan. 27, and, while
the instruction came three weeks after the 36-month oxygen cap took
effect Jan. 1, it did bring a few small sighs of relief.

“It definitely answered lots of questions that were out there,”
said Lisa Smith, health care attorney for Brown & Fortunato,
Amarillo, Texas. “This was probably the best news that providers
have seen. When you stack this up against what else has been coming
out, this is definitely the silver lining.”

Beleaguered by the cap and a 9.5 percent reimbursement cut that
also went into effect Jan. 1, providers have been clamoring for
information about requirements under the post-cap payment rules
— included in CMS’ 1,459-page 2009 Physician Fee Schedule — they have
protested as unworkable.

Smith said one of the major pluses of the guidance is that it
allows providers to start billing for portable oxygen even if the
stationary unit has not capped out.

“I think that is really going to help out providers,” she said.
“The other thing is that the way they are calculating the five-year
[useful life period], it basically starts when the initial oxygen
was placed on the patient and it doesn’t reset if you change
modalities or you have to swap out equipment or the patient changes
providers.”

The new guidance also makes it clear that providers do not need
to deliver oxygen contents every month in order to continue billing
on a monthly basis. However, Smith noted, “CMS has set a cap of
three months for contents to be delivered at one time, and
suppliers need to be aware of that.”

Jason Rogers, vice president of Care Medical in Athens, Ga.,
said he was pleased by another feature of the guidance. “We finally
got a little bit of positive [news], and that is that we don’t have
to have a retest,” said Rogers. “That is a huge burden that is not
placed on us. That would have really complicated the ability to
provide replacement oxygen equipment.”

While the guidance clarified several issues, Smith said,
“unfortunately, there are still some questions that CMS is going to
have to clarify.” For example, she pointed out, “They say that you
have to have a CMN for the replacement equipment, but it is not
clear to me whether this is a recertification CMN or a new initial
CMN.”

Smith said she has broached the question to CMS officials and
hopes to have an answer within a week or so. Until that issue is
cleared up, however, providers really can’t bill for replacement
equipment, she said.

“The other thing we need clarification on is the proof of
delivery when you are replacing equipment at the end of its useful
life,” she noted.

The guidance requires that providers have proof-of-delivery
documentation in their files attesting that the oxygen equipment
has been in use for at least five years. This could be a stumbling
block for those who are servicing a new patient and would not
necessarily have access to a delivery ticket from when the initial
equipment was first delivered. Smith has also asked CMS if there is
other documentation that would be acceptable but has not yet heard
back.

While the new guidance may prove helpful, providers and others
in the sector are still campaigning to get the 36-month cap
repealed and, in the long run, reform Medicare’s oxygen
benefit.

Toward that end, the American Association for Homecare recently
unveiled
its oxygen overhaul plan which, among other things, would
repeal the cap, change the status of oxygen entities from
“suppliers” to “providers” and exempt oxygen from competitive
bidding. It would also base reimbursement on a case-mix adjusted
system, under which providers’ payments would change based on
patient factors such as ambulation level, liter flow and modality.
(See AAHomecare Unveils
Oxygen Overhaul Plan, HomeCare Monday, Jan. 12.)

While most in the industry agree the benefit needs to be
reworked, some state associations have said the AAHomecare plan
does not contain enough specifics to gain their unqualified
support.

“This is a proposal that we were excited about when we heard
about its development and we really wanted to like,” said John
Shirvinsky, executive director of the Pennsylvania
Association of Medical Suppliers. “We like parts of it very
much. Where it starts to break down for us is in the details of how
you pay for [the benefit] and the whole tiered payment structure.
We really have no details on that. And if there are no details, why
are we even talking about this?

“We really need to reform the oxygen payment,” Shirvinsky
continued. “We are absolutely behind naming them ‘providers’
instead of ‘suppliers.’ But how the numbers work out after that
point is a head-scratcher.”

Care Medical’s Rogers, who is president of the Georgia Association of
Medical Equipment Services, agreed. “The general idea of having
recognition and a service component is a wonderful move in the
right direction,” he said. But GAMES cannot support the plan
because, among other things, it lacks specificity and immediacy, he
said.

Michael Reinemer, AAHomecare’s vice president, communications
and policy, acknowledged some details are lacking. “The question
isn’t whether or not oxygen should be fixed,” he said, “it’s
exactly what does it mean for an oxygen provider in terms of lots
of specifics. All of those details haven’t been completely worked
out.”

The oxygen cap needs to be repealed swiftly, he said, but that
is complicated by the fact that Congress wants to see a long-term
plan before legislators move on the cap. “We are getting pushback
from Congress asking for a long-term solution,” Reinemer said.

He noted AAHomecare is working with state associations toward
“something that everybody can live with,” and said the plan is to
be further discussed at the organization’s Feb. 11 Washington
fly-in. “The most pressing topic at the fly-in is how do providers
deal with this post-cap reimbursement,” he said. “There are lots of
questions.”

The AAHomecare plan isn’t the only one in the works. Rogers said
he is attempting to put together a plan. And the Big Sky Association
for Medical Equipment Services, which covers Idaho, Montana and
Wyoming, is also working on a plan that has garnered the interest
of the seven-state Midwest Association for Medical Equipment Services,
according to Tim Pederson, president and CEO of WestMed Rehab,
Rapid City, S.D., and MAMES president.

“The MAMES board of directors has come out in support of
concepts envisioned in the conceptual plan by the Big Sky
association called the ‘Oxygen Flip Plan,’” he said. “It’s not
finalized yet, but we like what we hear so far. From what we
understand, when you crunch the numbers, the savings are
substantial for CMS and it will provide stability for the industry
at the same time. That is something we need.”

View CMS’ Jan. 27
oxygen guidance, titled “Medicare Billing Requirements and
Policies for Replacement of Oxygen Equipment and Oxygen
Contents”.

For Smith’s answers to the most common questions about the
post-cap rules, see “Your Post-O2 Cap
Questions Asked and Answered” in this issue.

For information on AAHomecare’s Feb. 11 fly-in, visit the
“Homecare on Capitol Hill” Day event page.

View AAHomecare’s
summary of CMS’ oxygen policy payment provisions.