Medicare Begins Paying 2005 Oxygen Claims at 2004 Rates

Baltimore

In a move that eased cash-flow worries for home oxygen providers, CMS announced on Jan. 13 that it would cease holding oxygen claims and pay them at the 2004 Medicare fee schedule rate until the agency computes new 2005 amounts.

Late last year, CMS said it would put oxygen claims processing on hold until the agency received further pricing analysis from the HHS Office of Inspector General (OIG). That information, originally expected by mid-January, has been delayed. As of press time, CMS had not indicated when it might release the new fees.

Once this year’s fees are calculated, CMS said, claims with dates of service Jan. 1 forward will be paid at the new rates, but any 2005 claims that have already been paid using 2004 fees will not be retroactively adjusted.

“It’s a fair and equitable way to proceed,” a CMS official told HomeCare. “Breathing is important. We don’t want to cause a disruption for the industry or a disruption for the beneficiary.” The official added that once CMS receives OIG’s analysis, “I would expect that it would be a matter of days” before the agency applies the report to the 2005 fee schedule.

Under the Medicare Modernization Act (MMA), reimbursement for some high-volume items — including oxygen — is mandated to be reduced this year based on Federal Employees Health Benefits Plan (FEHBP) median pricing, to be derived from an OIG analysis.

But a September OIG report that recommended CMS cut oxygen reimbursement by between 10 and 20 percent drew criticism from HME stakeholders who said it was based on incomplete information. A study released last year by the American Association for Homecare found virtually no difference in oxygen reimbursement between fee-for-service Medicare and FEHB plans.