The Latest COVID-19 Relief Bill Includes Big Wins for HME

WASHINGTON, D.C. (December 21, 2020)—A broad COVID-19 relief legislative package finalized by House and Senate leaders includes provisions to address a Medicare payment disparity for oxygen products in rural areas stemming from the application of outdated budget neutrality provisions in the 1997 Balanced Budget Act.

While the payment disparity caused by the budget neutrality offset has been somewhat reduced by recent legislative and regulatory actions that temporarily apply a 50/50 blended rate to oxygen and other home medical equipment (HME) products in rural areas, this permanent legislative fix provides welcome long-term stability for suppliers serving less-populated communities.

The legislation also provides a three-month extension for the moratorium on 2% Medicare sequester cuts beyond their current Dec. 31 expiration date.  

“We’re gratified to see that Congress has finally fixed the oxygen budget neutrality issue unfairly impacting rural suppliers,” said Tom Ryan, AAHomecare president and CEO. “HME stakeholders have been asking Congress and CMS to address this problem since 2016, and those sustained grassroots advocacy efforts have paid off with a long-term win for our industry.” 

“HME suppliers and oxygen patients in rural areas also owe a debt of gratitude to Reps. Cathy McMorris Rodgers (R-Wash.) and Dave Loebsack (D-Iowa) for championing this cause in both the 115th and 116th Congress,” Ryan continued. “Their persistent support, high credibility on the Hill, and creative thinking in spearheading new legislation (HR 8158) were all critical in finally prevailing on this issue.”

“We’re also pleased to see an extension of the moratorium on the 2% Medicare sequester cuts for all healthcare providers,” added Ryan. “The HME community delivered a significant amount of grassroots outreach on this issue over the last two months as part of a broad healthcare coalition effort to extend the pause. While I believe a longer extension is warranted, this measure of relief will support the entire healthcare continuum’s work to bring the pandemic under control.”

The House and Senate are expected to pass the $900 billion COVID-19 relief package measure today. Details on these budget neutrality and sequestration pause provisions can be found in this summary developed by Rep. Kevin Brady( R-Texas), ranking GOP member on the House Ways & Means Committee; specific language on HME-related provisions from the summary noted below.

Waiving budget neutrality for oxygen under the Medicare program (HR 8158). This section would specify that the budget neutrality requirement for establishing new payment classes of oxygen and oxygen equipment no longer applies, thereby increasing payment for certain oxygen equipment in rural areas. [page 6].

Help for Medicare Providers Worried About COVID impacts. Finally, the bill delays the 2% sequester cuts that were supposed to resume January 1, 2021, for three additional months. [page 2, 4th bullet]