Reduce Oxygen Cap to 13 Months, OIG Repeats

WASHINGTON — Most oxygen providers are still trying to
cope with effects of the 36-month rental cap, which took effect in
2009. But according to an OIG report released yesterday, CMS should
work with Congress to further reduce the rental period for
oxygen. 

In its Compendium of Unimplemented Recommendations, an
annual report to Congress that summarizes cost-saving
recommendations for Medicare and Medicaid that haven’t been
implemented, the OIG reminded lawmakers of its ongoing
recommendation based on data from a 2006 report. If Medicare rental payments for oxygen
concentrators were limited to 13 months, the report said, the
program and its beneficiaries would save about $3.2 billion over a
period of five years.

The industry strongly disputed the 2006 report. (For more, see
“AAHomecare Details Flaws in
OIG Oxygen Report,” October 2006.)

Nevertheless, the OIG said in its March 16 compendium, “We
continue to encourage CMS to work with Congress to reduce the
rental period for oxygen equipment.”

The recommendation follows a Feb. 14 Government Accountability
Office report that found “Medicare’s payment for home oxygen
overcompensates suppliers for providing stationary oxygen
concentrators.” As a result of its findings, the GAO also said
Congress should consider reducing home oxygen
payment rates.

In its FY2011 report, the OIG said CMS concurred with its
recommendation but noted that reducing the rental period for from
36 to 13 months “requires a statutory change. Although bills have
been introduced in the past, none has passed.”

The recommendation even made the report’s seven-item “priority
list” for Medicare Parts A and B, which the OIG believes represent
the most significant opportunities to impact HHS programs. Three
others on that list also involve DME:

• Ensuring DME suppliers’ compliance with Medicare enrollment
  standards;
• Eliminating Medicare’s vulnerability to fraudulent or excessive
  inhalation drug claims; and
• Ensuring that Medicare power wheelchair suppliers meet
  documentation requirements.

Overall, the OIG said in its report, Medicare and Medicaid could
have saved $8.7 billion in FY2011 if all of its recommendations had
been implemented.

View the entire compendium. The section on DME begins on
page 43.