Not Perfect, but Better

The president’s FY 2008 budget proposal, submitted to Congress in early February, dramatically improves this industry’s ability to have a constructive conversation with Congress regarding how Medicare should pay for home oxygen therapy.

The proposed policy would limit payments for “traditional” home oxygen equipment to 13 months, while preserving payment at 36 months for what is generally described as “new technology.” According to information from the administration, that “new technology” includes in-home oxygen transfilling systems as well as portable oxygen concentrators.

The 2008 budget proposal has important implications for the HME industry’s lobbying strategy this year in Congress — as well as for providers’ businesses.

As an industry, it is important that we support the administration’s promotion of new technology while remaining opposed to further payment cuts for home oxygen therapy that may erode beneficiary access (i.e., a 13-month cap on traditional technology).

But though far from perfect, the budget’s oxygen proposal illustrates that the administration and the Department of Health and Human Services have an understanding of the cost and consumer benefits of new home oxygen technology. As we discuss the issue of appropriate Medicare payment for home oxygen with members of Congress, however, we must have a complete and necessarily more complicated conversation.

Note that a study issued in September by the Office of Inspector General has produced an alarming and incorrect sound bite on Capitol Hill that appears to support a 13-month payment cap. The one sentence in that report that explains that the OIG looked only at oxygen concentrator acquisition costs, and did not address at all the costs of ambulatory/portable oxygen, has become lost.

The president’s proposal of a new technology exemption provides an excellent mechanism to facilitate policymakers’ understanding of how ambulatory oxygen is an underpaid — not over-reimbursed — part of the entire oxygen equation.

In late January, Rep. Tom Price, R-Ga., reintroduced a bill that would repeal the Deficit Reduction Act’s current 36-month payment cap and forced beneficiary ownership of oxygen equipment at 36 months. The Home Oxygen Patient Protection Act, H.R. 621, is identical to last congressional session’s H.R. 5513, which garnered 84 cosponsors.

This is an important platform for providers to use in communicating with their congressional representatives. We must educate lawmakers about the ill effects of requiring beneficiaries to own their complex medical technology, and urge all congressmen to sign on to H.R. 621.

In January, CMS’ new oxygen payment rule, which also promotes beneficiary access to new technology, went into effect. Between the payment rule and the administration’s proposed legislative provision, these are clear signals that the government realizes the advantages of new oxygen technology, and it will continue to move reimbursement in that direction.

Another important component of the administration’s 2008 budget proposal for home oxygen is its silence on the equipment title transfer enacted by the DRA. This is “Washington speak” that sends a message to Congress that the administration does not oppose reversal of the mandatory beneficiary ownership provision. This is a huge positive for providers, since the president supports providers’ retention of oxygen equipment ownership.

The president’s proposed budget is the starting point for Congress and its annual budget process. Congress will next put together its own proposed budget packages, some of which may follow the administration’s lead, some of which will not.

We have a significant opportunity with this new Congress to make progress on moving toward an improved Medicare oxygen policy. The mandatory title transfer policy is ripe for repeal, and H.R. 621 is an excellent vehicle on which to base discussions with your representatives and senators.

A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 440/329-6226 or by e-mail at [email protected].