An Open Letter to the Home Oxygen Community
From Tyler Wilson, President
American Association for Homecare
September 14, 2009
The American Association for Homecare has worked for many months on
the proposal to reform the Medicare home oxygen benefit. The
reform proposal is the basis for the legislation now being
spearheaded in the House of Representatives by Congressman Mike
Ross.
Oxygen providers, the broader community of stakeholders, including
physicians, clinicians and patient groups, CMS, and Congress
itself, have all expressed concerns about the current Medicare
oxygen benefit. Taking a lead on reforming the benefit is the
best way for the oxygen community to show ourselves as being
responsive to these various concerns. We have stepped up and
framed the legislative solution and, importantly, created the
opportunity for some long-needed stability for oxygen policy coming
out of Medicare.
Among the guiding principles that AAHomecare has relied upon in
working to craft an oxygen reform proposal:
- Eliminating the 36-month cap;
- Gaining recognition under Medicare of the services provided to
patients as part of the home oxygen benefit; - Preventing further cuts to Medicare reimbursement for oxygen,
which means putting forward a budget-neutral proposal that does not
endorse taking any money away from the total allocation of Medicare
dollars being spent on oxygen; - Providing some degree of transparency into the costs of
providing home oxygen so that our critics at CMS and in Congress
understand the true nature of the service and the surrounding
infrastructure that responsive providers must have in place;
and - Ensuring certain basic patient protections.
With the discussions and compromise that came out of the August 18
meeting of oxygen stakeholders in Washington, the terms of the
oxygen reform proposal were largely finalized. Oxygen
providers and groups representing physicians, clinicians, and
patients worked through some very difficult issues and developed a
proposal that seemed to satisfy the concerns of all the
stakeholders.
Importantly, we were able to reach a compromise and get the results
of that agreement to Rep. Ross who has agreed to make every effort
to modify his original reform proposal before it moves further
along in the House Energy and Commerce Committee. AAHomecare
has made a commitment to work with Rep. Ross in order to get the
compromise provisions incorporated into his legislation. The
fact that we have a prominent House negotiator, like Rep. Ross,
willing to advance the oxygen reform proposal presents a critical
opportunity that the oxygen community cannot ignore.
With last week’s introduction of the Senate Finance Framework
on health reform, the importance of the Ross proposal should be all
the more apparent. The oxygen payment provision in the Senate
Finance Committee Framework is projected to cut $1 billion from the
Medicare home oxygen benefit over the next ten years. That is
on top of competitive bidding results — which the Framework
document would impose more quickly on the rest of the country
(non-bid areas) after Round One of bidding — perhaps even
precluding the need for a Round Two.
As the health reform effort in the House and Senate moves forward,
the Ross legislation will serve as a critical response to the very
harmful provisions being proposed by the Senate Finance
Committee. Without the Rep. Ross legislation on oxygen in the
final House health reform package, the oxygen community will be at
the complete mercy of whatever final determination is made by
Senate Finance negotiators. Again, the Ross legislation would
take no money out of the Medicare budget for home oxygen.
Senate Finance is proposing to cut $1 billion. AAHomecare
does not want to squander the opportunity we have with the Ross
legislation. We hope the rest of the oxygen community
concurs.
After the August 18 meeting, one issue remained to be resolved
regarding the Ross proposal. The issue concerns repeal of the
36-month cap and how to allow Medicare to make reimbursement
payments over 60 months (instead of 36) without costing Medicare
money. Otherwise, it would violate one of Rep. Ross’
key principles — that it must be budget-neutral and not
require any cuts or additional spending by Medicare. In order
to spread 36 months of reimbursement over 60 months, the resulting
monthly reimbursement must necessarily be lower. The question
is how the impact of that lower reimbursement should be apportioned
among the various oxygen modalities.
Of course, this is only an interim issue (i.e. the reimbursement
rates moving from a 36- to 60-month structure) because after the
transition period, the new rate mechanism called for under the Ross
proposal will take effect. That new mechanism will have CMS
determining rates based on cost surveys.
For the interim payment period, AAHomecare has recommended to Rep.
Ross that the combined portable Medicare payment rate be 90 percent
of the current 2009 allowable for that modality. New
technology would remain at the current 2009 level. Once the
90 percent calculation is made for combined portable,
concentrator-only rates would be determined in accordance with the
Ross mandate that the entire payment system be
budget-neutral.
The AAHomecare decision regarding this interim payment system is
the most responsible recommendation and the one that best meets the
needs given the various concerns expressed by oxygen providers
across the ranks of the Association’s membership. We
have heard from many small, independent providers with many
different opinions on this issue, and the foregoing recommendation
is the option best suited given the different patient-mix profiles
that exist within the HME sector.
During the long process of developing a reform proposal, AAHomecare
has strived at every point along the way to recommend solutions and
offer policy options that will protect oxygen suppliers and
patients while also preventing more of the long string of cuts to
oxygen reimbursement. There are few perfect solutions to any
of the issues that have surfaced, and rarely has the HME sector
been unified in its thinking on any of these complex
questions.
Now, however, there is one concept that the entire oxygen community
should be able to unify around and support: the Ross legislation
presents a critical counter to the Senate Finance Framework
proposal. Rep. Ross’ budget-neutral legislation with no
proposed reductions in the Medicare spending for home oxygen is the
best option for fending off the draconian cuts, on top of
competitive bidding, of $1 billion over 10 years being proposed by
Senate Finance.
AAHomecare hopes that every HME company and every group
representing stakeholders in the oxygen community will now join the
Association in supporting the Ross legislation.
There are many other challenges and threats facing the HME
community. The American Association for Homecare will continue to
work toward the best possible outcomes for HME providers and
patients at every turn.
Tyler J. Wilson, President
American Association for Homecare (AAHomecare)
2011 Crystal Drive, Suite 725
Arlington, Virginia 22202
[email protected]
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