CMS Issues Final Rule on Oxygen Maintenance for 2010

BALTIMORE — In a late Friday list-serv message, CMS
announced that the following final rule is on display at the
Federal Register: “Medicare Program; Payment Policies
Under the Physician Fee Schedule and Other Revisions to Part B for
CY 2010.”

The new final rule includes rules on:

1. maintenance and servicing of oxygen equipment;
2. the establishment of a notification process for suppliers
   choosing to become grandfathered suppliers under the DMEPOS
   competitive bidding program; and
3. payment for damages resulting from termination of contracts
   awarded in 2008 under Round 1.

The text of the message follows:

Maintenance and Servicing of Oxygen
Equipment

New rules regarding payment and supplier responsibilities for
maintenance and servicing of oxygen equipment have been established
in accordance with Medicare Improvements for Patients and Providers
Act (MIPPA) of 2008 requirements. The new maintenance and servicing
rules permit payment every 6 months, beginning 6 months after the
end of the 36-month rental payment cap, for maintenance and
servicing of oxygen concentrators and transfilling equipment to
ensure that the equipment is kept in good working order for the
safety of the beneficiary. The new rules are effective for items
furnished on or after July 1, 2010. The maintenance and servicing
policy established for 2009 as part of an Interim Final Rule (73 FR
69726) will continue for items furnished through June 30, 2010.

Beginning July 1, 2010, a single maintenance and servicing
payment of $66 may be made once every 6 months for maintenance and
servicing of an oxygen concentrator (stationary or portable) and,
if applicable, oxygen transfilling equipment. Separate payment is
not made for each piece of equipment serviced. The maintenance and
servicing payment does not apply to liquid or gaseous oxygen
equipment (stationary or portable). The maintenance and servicing
fee covers all maintenance and servicing needed during the 6-month
period. The supplier is responsible for performing all necessary
maintenance, servicing and repair of the equipment at the time it
is needed and must also visit the beneficiary’s home during the
first month of each 6-month period to inspect the equipment and
perform any necessary maintenance and servicing needed at the time
of each visit.

CMS will issue program guidance with specific information for
claims processing and beneficiary education over the next few
months.

Grandfathering Notification
Process

A process has been established for suppliers that are not
awarded contracts under the DMEPOS Competitive Bidding Program to
provide notification of their decisions regarding whether they will
continue furnishing rented durable medical equipment (DME) and/or
oxygen and oxygen equipment as grandfathered suppliers under the
program. This process requires noncontract suppliers to provide
written notification of their grandfathering decisions to CMS and
all Medicare beneficiaries who reside in a competitive bidding area
to whom they are furnishing these items. The process also requires
beneficiaries to notify grandfathered suppliers regarding whether
they wish to continue receiving their items from a grandfathered
supplier.

The regulation also establishes a requirement that there be
coordination between contract and noncontract suppliers regarding
the removal and delivery of medically necessary items to and from a
beneficiary’s home. Noncontract and contract suppliers are required
to work together to ensure that DMEPOS services are uninterrupted.
A grandfathered item is defined in the regulation to encompass all
oxygen and oxygen equipment or all rented DME within a product
category other than oxygen and oxygen equipment. Therefore, if a
supplier chooses to become a grandfathered supplier for oxygen and
oxygen equipment, it must continue to furnish all items of oxygen
and oxygen equipment to all beneficiaries who choose to continue
receiving the items from the grandfathered supplier. Likewise, if a
supplier chooses to become a grandfathered supplier for an item of
rented DME in a given product category, it must continue to furnish
all rented DME in the product category to all beneficiaries who
choose to continue receiving the items from the grandfathered
supplier.

Process for Considering Claims for
Damages

MIPPA terminated contracts awarded under Round 1 of the Medicare
DMEPOS Competitive Bidding Program and stipulated that, to the
extent that any damages may be applicable as a result of the
termination of contracts, such damages shall be payable from the
Federal Supplementary Medical Insurance Trust Fund.

In accordance with the final regulation, claims for damages may
only be filed by suppliers that submitted a bid and were awarded a
contract in 2008 during Round 1 of the program. Any damages that
are claimed must be substantiated and must be the direct result of
termination of a contract under Round 1 of the program. The extent
of the obligation for payment of damages is limited to damages
realized by the contract supplier. Therefore, entities that entered
into subcontracting relationships with a contract supplier for
purposes related to furnishing items and services under the program
are not eligible to submit claims for damages.

The Competitive Bidding Implementation Contractor (CBIC) will be
the intake point for claims for damages, which will be reviewed by
the CBIC and CMS. Claims must comply with all requirements
specified in the final regulations. The CBIC will accept claims
that are submitted by April 1, 2010. The date of submission is the
actual date of receipt of the completed claim by the CBIC. No
claims for damages will be accepted if they are received by the
CBIC after April 1, 2010. If a claim for damages is not submitted
by the deadline, the CBIC will recommend to CMS not to process the
claim any further.

Claims for damages must be submitted in writing to the following
address (electronic submissions via e-mail or facsimile will not be
accepted):

Competitive Bidding Implementation Contractor
2743 Perimeter Pkwy., Ste. 200-400
Augusta, Georgia 30909-6499

Every effort will be made to make a determination within 120
days of initial receipt of a claim or the receipt of additional
information, whichever is later. However, in the case of more
complex cases, or in the event that a large volume of claims is
submitted, it may take more than 120 days to process a claim.

The final rule can be viewed at federalregister.gov/page2.aspx.