HME Stakeholders Scramble As Budget Bill Vote Looms

WASHINGTON–With Congress scheduled to vote on the 2006 federal
budget reconciliation bill Wednesday, the American Association for
Homecare is rushing to correct misinformation that it says is being
spread in support of the bill.

The Deficit Reduction Act, or S. 1932–which contains $39.7
billion in spending reductions, with $6.4 billion in savings from
Medicare and $4.8 billion from Medicaid over five years–would cap
oxygen rentals at 36 months (see HomeCare
Monday, Jan. 17) and rentals of most other DME, except for
power wheelchairs, at 13 months.

AAHomecare, which has spearheaded HME efforts against the
measure, said a document circulating in some Congressional offices
last week claims that concern about the bill is unfounded.

According to the document, which is called “Reforming the
Medicare Oxygen Payment System is Good Government,” the Medicare
program will pay for service and repairs to beneficiaries’ oxygen
equipment as well as continue to pay for deliveries of oxygen.

But AAHomecare argues that the bill does not contain specific
assurance or directive for payment–just ambiguous language
concerning “payments for oxygen” and “maintenance and service”
after the purchase and transfer of title for the equipment to the
beneficiary. While the bill suggests such payments “may” be
available and will be determined by HHS, AAHomecare said, there are
no codes or policies governing the maintenance and services of
oxygen technologies in today’s Medicare system.

Moreover, the association said, the bill provides no guidance
for many service components–such as disposable accessories,
24-hour emergency service and equipment replacement–that are
currently required and incorporated into Medicare oxygen rules and
payment.

“Once the patient owns items such as oxygen cylinders, the
delivery and filling of such will become the beneficiary’s
responsibility,” AAHomecare said. “There are numerous state and
federal regulations governing the safe handling, filling and
transport of medical oxygen that will be complicated with this
change in ownership.”

According to its proponents, however, the Deficit Reduction Act
changes oxygen payment from perpetual rental to a rent-to-own
program because Medicare currently pays significantly more than the
retail price to buy oxygen equipment–and that payment system needs
reform.

For example, according to the document, under current law,
“Medicare pays indefintely for the rental of oxygen equipment at a
rate of approximately $200 per month (CMS). So after five months,
Medicare has paid for the piece of equipment. Yet the program
continues to make payments for the equipment–and beneficiaries
continue to pay coinsurance. Medicare beneficiaries who need oxygen
rent the equipment and use it for an average of 30 months,
according to CMS. This means that Medicare and beneficiaries will
pay several times the cost of the equipment over the course of the
rental period.”

The document points out that provisions of the budget bill
change this system by transferring ownership of the equipment to
the beneficiary after 36 months of rental, so that neither Medicare
nor beneficiaries “continue to pay for equipment that has been more
than paid for.”

To access the full text of “Reforming the Medicare Oxygen
Payment System is Good Government,”
click here.

To access the full text of AAHomecare’s “Response to Arguments
in Favor of Changes to O2 Policy,”
click here.

To view the text of the budget bill, also known as S. 1932,
visit http://thomas.loc.gov.

For further information about provisions that would affect DME
in the budget bill, visit www.aahomecare.org or www.vgm.com.

To find your members of Congress, click here.