CMS Alters Oxygen Payments in Final Rule

Baltimore

CMS will increase some monthly oxygen payments — up from those released in its proposed rule — under a final rule issued last month.

The rule implements a provision in the Deficit Reduction Act that requires providers to transfer title of oxygen equipment to the beneficiary after a 36-month rental period, which began Jan. 1, 2006, for beneficiaries already using oxygen this year. The provision also caps rental of other DME, such as wheelchairs and hospital beds, at 13 months.

Under changes in the 416-page final rule, which takes effect Jan. 1, 2007, payments for stationary equipment during the rental period increased from $177 per month in the proposed rule to $198.40. After the ownership transfer, CMS will pay providers $77.45 a month to fill portable cylinders vs. a proposed payment of $55. Also under the final rule, the add-on rate for oxygen generating portable equipment will be $51.63 per month for 2007.

The agency said it will redistribute the current payment amounts each year to ensure annual budget neutrality, required under the law.

However, much of the rule is identical to the draft proposal, issued in July, which completely overhauled the oxygen payment system, creating new fees and classes.

CMS stressed that Medicare will continue to make monthly payments for oxygen contents for beneficiary-owned tanks and cylinders for as long as the patient medically needs oxygen.

“In general, we are pleased that the administration/CMS recognize the various patient and cost-saving benefits of patients using new technology [such as home transfilling systems], and that CMS addressed some of the industry’s most significant concerns,” said Cara Bachenheimer, vice president, government relations, for Elyria, Ohio-based Invacare Corp.

“We are also glad that CMS is giving oxygen patients the freedom to switch to new technology, if they sign a patient consent form. CMS obviously wants to make it easier for patients to have access to the best technology available to them.”

For more on CMS’ oxygen overhaul, see Bachenheimer’s “Washington Wit & Wisdom” on page 46, and “Market Analysis” on page 28.

To view the final rule, visit www.cms.hhs.gov/center/dme.asp