HME Providers Receive Long-Awaited Oxygen Relief

WASHINGTON, D.C. (January 8, 2020)—On Dec. 21, 2020, both the House and Senate passed a COVID-19 relief bill that included provisions addressing a Medicare payment disparity for oxygen products in rural areas. 

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 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.  

A Timeline of Advocacy
In 2019 AAHomecare’s Regulatory Council developed pushing back against the “double dip” cuts for rural oxygen.  These were the first of multiple occasions that AAHomecare went on record to oppose this poorly conceived policy, including multiple rounds of comments on CMS Proposed Rules and Interim Final Rules, as well as responses to House Ways and Means Committee Requests for Information on Medicare policy in 2017 and 2019.

These comments and conversations with CMS and HHS officials met with a familiar reply: the policy could not be fixed by regulatory action; only Congress had the power to cure the issue.

In early 2017, the association began to engage Capitol Hill on the issue, leading to the inclusion of budget neutrality provisions in H.R. 4229, legislation also seeking to limit Medicare reimbursement cuts for suppliers outside of competitive bidding areas. Sustained grassroots advocacy ultimately secured 158 co-sponsors for the legislation.  In the next Congressional session, our champions on Capitol Hill introduced a similar measure, H.R. 2771. 

In September of 2020, Reps. Cathy McMorris Rodgers (R-Wash.) and Dave Loebsack (D-Iowa) introduced H.R. 8158, a bill focused specifically on the budget neutrality fix, and gained approval by the House Energy & Commerce Committee.  And finally, provisions from that legislation were included in the COVID-19 bill passed by Congress and signed into law last December.  After four years of persistent engagement with Federal regulators and on Capitol Hill, we finally have a permanent fix that will put $650 million back into rural oxygen suppliers’ bottom lines over the next ten years, according to a Congressional Budget Office estimate.

Comments from Tom Ryan
“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 in a press release.  “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 health care 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.”

Details of the Legislation
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]