NOC vs. HOTS: Dueling Oxygen Proposals Hit Congress

WASHINGTON — After a weeks-long wait as the New Oxygen
Committee’s oxygen reform bill was drafted into legislative
language, the American Association for Homecare
reported last week it expects the bill to be introduced today by
Rep. Mike Ross, D-Ark., a former HME owner.

“We expect the budget-neutral oxygen reform bill to be
introduced in the House by Monday, and we’re very happy to have an
influential champion in Congressman Mike Ross,” said AAHomecare
President Tyler Wilson. He added the association held a strategy
call Friday “which gathered a representative group of AAHomecare
members who could speak for all sectors of the HME community to
make sure we are working in a coordinated fashion both on the Ross
bill and in counteracting threats of further cuts to the oxygen
benefit.”

Among other things, the overhaul plan crafted by the NOC would
eliminate the 36-month cap on oxygen, exempt oxygen from
competitive bidding and recognize the services required in
providing home oxygen therapy. Committee members split, however, on
the addition of two provisions to the original 13-point plan that
would change status from oxygen “supplier” to “provider” and add
measures on cost reporting. The plan moved to bill-drafting stage
with the controversial provisions intact. (For more, see Industry
Scrambles to Unite on Oxygen Reform, March 30.)

In June, Ross sent a
letter signed by 70 other representatives to several key House
committees as a “placeholder” for the bill, requesting that reform
of the Medicare oxygen benefit be included in health care reform
legislation this year.

But the Ross bill is not the only oxygen reform proposal that
has made its way to Congress.

According to a press release issued Friday, both the House Ways
and Means and the Senate Finance committees asked for a
“simplified” oxygen proposal from the Committee to Save Independent
HME Suppliers and the National Association of Independent
Medical Equipment Suppliers.

After the groups met in early June with staff from both
committees — charged with drafting overall health reform
legislation — Wayne Stanfield, NAIMES president and CEO, said
they requested an oxygen reform plan that would:

• Bundle payments for all oxygen equipment, suppliers and service
  provided to any given patient into two categories;
• Establish a means for appropriate qualification of patients for
  these bundled oxygen therapy categories based on objective
  criteria; and
• Come out budget-neutral or with a savings.

The CSIHME Legislative Affairs Board drafted a document called
the Home Oxygen Therapy Service, or HOTS, plan that incorporates
“many of the same fundamental concepts” as those in the NOC plan,
Stanfield said. It would end the 36-month cap, include elements of
a service component, require an Office of Inspector General study
of the actual cost of home oxygen services and create an oxygen
benefit advisory panel.

But the plan differs from the NOC plan, he said, because “there
is no provider status, no cost reporting and there are no
geographic index adjustments … Our plan is essentially the
original 13-point [NOC] plan with modifications to match what Ways
and Means asked us to do.”

Stanfield said CSIHME/NAIMES completed its plan in less than a
week after the Capitol Hill meetings and presented it to both
committees “by the deadline they wanted” last month.

CSIHME/NAIMES said the HOTS plan:

• Results in a budget savings of more than $1.2 billion over five
  years. “That’s based on our numbers,” Stanfield said, “but the
  [Congressional Budget Office] may see it differently.”
• Addresses utilization issues by eliminating migration of
  patients to a higher reimbursement category.
• Eliminates the cap on payments for home oxygen therapy.
• Addresses stated concerns with the payments for stationary
  oxygen concentrators.
• Simplifies the solution to make it acceptable to Congress and
  CMS.
• Does not affect competitive bidding, which must be addressed on
  its own.
• Addresses the known concerns of patients, physicians and
  suppliers.
• Addresses the fact that oxygen is a drug regulated by the
  FDA.
• Is modality-neutral and allows appropriate payments for new
  technology such as oxygen-generating portable equipment and home
  transfilling equipment.
• Notes these individual components are linked inextricably and
  must be taken together to ensure the full savings and streamlined
  process.
• Notes the plan is based on recent industry consensus among
  small business oxygen providers.

“It was clear from discussion with the committees that there was
a concern with the complexity of the other proposal,” Stanfield
said, adding that the HOTS alternative “does the things necessary
to protect patients, end the cap and adjust the reimbursement to
offer a savings … We felt like offering savings was important,
and it addresses the high cost of concentrators.”

Stanfield said he expected most or “cherry-picked parts” of the
HOTS plan would be included as part of the Senate Finance
Committee’s health reform bill. “And it might be mentioned in the
House draft bill, although they may defer the oxygen plan to the
Senate,” he said.

Stanfield said the proposal has also been given to the Energy
and Commerce Committee, which, along with the Ways and Means and
Education and Labor committees, has jurisdiction over health care
reform in the House.

Some HME stakeholders have said they’re worried the industry
divide over oxygen reform could hurt its chances — and those
of ending the 36-month cap — as health reform progresses.

But Stanfield said he doesn’t see any confusion in Congress.
“They are asking what do we want, and we are telling them,” he
said.